Territorial market power as a source of inequalities in the automation era

Roberta Capello, Camilla Lenzi and Elisa Panzera

Regional Studies, 2025, vol. 59, issue 1, 2582658

Abstract: By reducing the importance of labour to firms and increasing the returns to wealth, automation generally decreases the labour share of income. This effect can vary depending on the degree of sectoral market concentration, as highlighted in the literature through the superstar firms’ hypothesis. This paper argues that, beyond sectoral market power, factors linked to spatial heterogeneity may also shape the relationship between automation and the labour share, particularly the presence of highly specialised and geographically clustered firms. More specifically, if the regional market structure is characterised by monopolistic behaviours of local firms, a territorial market power effect may take place, exerting a further detrimental role on the labour share of income. Based on a large-scale analysis of the manufacturing sector in European NUTS-2 regions in the period 2011–19 and the estimation of a pooled ordinary least squares regression, the paper confirms a sectoral market power effect and proves the existence of a territorial market power effect when automation is introduced in highly specialised regions. These results are further reinforced by empirical evidence showing the automation-related detrimental effects on the labour share of income in highly concentrated regional markets.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00343404.2025.2582658 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:regstd:v:59:y:2025:i:1:p:2582658

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CRES20

DOI: 10.1080/00343404.2025.2582658

Access Statistics for this article

Regional Studies is currently edited by Ivan Turok

More articles in Regional Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().