IMF Working Papers

Global Declining Competition

By Federico J Diez, Jiayue Fan, Carolina Villegas-Sánchez

April 26, 2019

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Federico J Diez, Jiayue Fan, and Carolina Villegas-Sánchez. Global Declining Competition, (USA: International Monetary Fund, 2019) accessed November 8, 2024

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.

Subject: Agroindustries, Competition, Economic sectors, Emerging and frontier financial markets, Financial markets, Production, Productivity, Total factor productivity

Keywords: Agroindustries, Competition, Emerging and frontier financial markets, Firm markup, Firm size, Foreign exposure, Global, High-markup firm, Incumbent firm, Laggard firm, Market power, Market share, Markup increase, Production function, Productivity, TFP, Total factor productivity, WP

Publication Details

  • Pages:

    42

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2019/082

  • Stock No:

    WPIEA2019082

  • ISBN:

    9781498311113

  • ISSN:

    1018-5941

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