SECTORAL MARKET POWER IN GLOBAL PRODUCTION: A THEORETICAL AND OBSERVATIONAL STUDY

Panagiotis Iliopoulos, Giorgos Galanis, Ashok Kumar () and Lilit Popoyan
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Ashok Kumar: Department of Management, Birkbeck College, University of London, Malet Street, Bloomsbury, London, WC1E 7HX, UK
Lilit Popoyan: University of Naples “Parthenope†, Via Generale Parisi, 13, I-80132 Naples, Italy

Advances in Complex Systems (ACS), 2022, vol. 25, issue 02n03, 1-48

Abstract: In a globalized world, the distribution of value-added across firms depends on a number of factors that vary across space. A key factor is related to the different types of competition on the multilayer structure of production, which are characterized by different types of (market) power. In this paper, we first argue that PageRank centrality is able to capture sectoral market power within the complex structure of global production. We then study the empirical properties of this market power measure and demonstrate a power-law relationship between sectoral PageRank centrality and relative sectoral profits. This power-law relationship has (international) political economy implications as it demonstrates the high incentives of sectors to become more central to increase their relative profits.

Keywords: Global Production Networks; market power; centrality distributions; power law (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1142/S0219525922400057

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