Market Power and Innovation in the Intangible Economy

Maarten De Ridder

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper offers a unified explanation for the slowdown of productivity growth, the decline in business dynamism and the rise of market power. Using a quantitative framework, I show that the rise of intangible inputs – such as software – can explain these trends. Intangibles reduce marginal costs and raise fixed costs, which gives firms with high-intangible adoption a competitive advantage, in turn deterring other firms from entering. I structurally estimate the model on French and U.S. micro data. After initially boosting productivity, the rise of intangibles causes a significant decline in productivity growth, consistent with the empirical trends observed since the mid-1990s.

Keywords: Productivity; Growth; Business Dynamism; Intangible Inputs; Market Power (search for similar items in EconPapers)
Date: 2019-03-25
New Economics Papers: this item is included in nep-com, nep-cse, nep-dge, nep-eff, nep-ind and nep-tid
Note: mcd58
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

Downloads: (external link)
https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1931.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: Market Power and Innovation in the Intangible Economy (2024)
Working Paper: Market power and innovation in the intangible economy (2024)
Working Paper: Market power and innovation in the intangible economy (2022)
Working Paper: Market Power and Innovation in the Intangible Economy (2019)
Working Paper: Market power and innovation in the intangible economy (2019)
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:cam:camdae:1931

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer (jd419@cam.ac.uk).