Market Concentration and the Productivity Slowdown

Jane Olmstead-Rumsey

MPRA Paper from University Library of Munich, Germany

Abstract: Since around 2000, U.S. aggregate productivity growth has slowed and product market (sales) concentration has risen. At the same time, productivity differences among firms in the same sector appear to have risen dramatically. In this paper I propose a rich model of competition and innovation to explain the coincidence of these three observations. In the model a key parameter governing all three phenomena is the probability that innovating firms make radical innovations. Thus one explanation for rising concentration, slower productivity growth, and wider technology differences among firms is that the incidence of radical innovations has slowed relative to the 1990s, when the internet and other information technology radically transformed production and sales technology in many sectors.

Keywords: Endogenous growth; market concentration; market power; productivity slowdown; superstar firms (search for similar items in EconPapers)
JEL-codes: E23 L1 O3 O4 (search for similar items in EconPapers)
Date: 2019-04-10
New Economics Papers: this item is included in nep-com, nep-eff, nep-ind, nep-ino, nep-mac and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/93260/1/MPRA_paper_93260.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/98049/5/MPRA_paper_98049.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/107000/12/MPRA_paper_107000.pdf revised version (application/pdf)

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:pra:mprapa:93260

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().