Global Declining Competition

Author/Editor:

Federico J Diez ; Jiayue Fan ; Carolina Villegas-Sánchez

Publication Date:

April 26, 2019

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Using a new firm-level dataset on private and listed firms from 20 countries, we document five stylized facts on market power in global markets. First, competition has declined around the world, measured as a moderate increase in average firm markups during 2000- 2015. Second, the markup increase is driven by already high-markup firms (top decile of the markup distribution) that charge increasing markups. Third, markups increased mostly among advanced economies but not in emerging markets. Fourth, there is a non-monotonic relation between firm size and markups that is first decreasing and then increasing. Finally, the increase is mostly driven by increases within incumbents and also by market share reallocation towards high-markup entrants.

Series:

Working Paper No. 19/82

Subject:

English

Publication Date:

April 26, 2019

ISBN/ISSN:

9781498311113/1018-5941

Stock No:

WPIEA2019082

Format:

Paper

Pages:

42

Please address any questions about this title to publications@imf.org