Uncertainty and Market Power: An Empirical Investigation

Pantelis Kazakis

MPRA Paper from University Library of Munich, Germany

Abstract: Recent academic research documents a sharp increase in global market power. Using newly created and more precise data on aggregate market power (see De Loecker and Eeckhout, 2021), we add to the literature on the determinants of market power by investigating whether and how uncertainty may have played a role in its increase. Using a global sample of the world’s major economies, we find that uncertainty is associated with more market power. In addition, we find that higher levels of democracy and a better functioning political system, are negatively associated with market power.

Keywords: uncertainty; economic fluctuations; market power; market share; barriers to entry (search for similar items in EconPapers)
JEL-codes: D80 L10 L11 (search for similar items in EconPapers)
Date: 2023-05-30
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:117914

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