Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries

John P. Weche and Joachim Wagner ()
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Joachim Wagner: Leuphana University of Lüneburg, Germany

No 391, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: Recent empirical studies suggest that there is a rising trend of market power across sectors in advanced economies. We contribute to this line of research by providing industry-speci_c evidence for German manufacturing industries, based on representative high-quality _rm level data from o_cial statistics that cover _rms from all size classes with more than 20 employees (2005{2013). We compare _rm-speci_c markups and industry concentration as market power indicators and discuss the role of digitization. Our results do not suggest an overall average increase in market power in German manufacturing. However, if we look at changes in individual industries, then we do _nd increasing markups and an increasing concentration in many industries. We also demonstrate the ambiguous relationship between the two indicators and _nd no clear evidence that digital transformation and market power go hand in hand.

Keywords: Market power; business concentration; markups; digitalization; manufacturing; Germany (search for similar items in EconPapers)
JEL-codes: D4 L1 L4 L5 L6 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2020-07
New Economics Papers: this item is included in nep-com
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Journal Article: Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries (2021)
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