Global Declining Competition

IMF Working Papers, April 26, 2019

Source details

Using a new firm-level dataset on private and listed firms from 20 countries, the paper documents 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.

New firm-level dataset covering private and listed firms from 20 countries.
Focus on firm markups, firm size, incumbents versus entrants, and market share reallocation.

Subjects: 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