## Chart of the Week: The Rise of Corporate Giants

_IMF Blog, June 6, 2018_

## Source details

**Canonical URL:** [Chart of the Week: The Rise of Corporate Giants](https://www.imf.org/en/blogs/articles/2018/06/06/blog-the-rise-of-corporate-giants)

## Other formats

- [Markdown version](/en/blogs/articles/2018/06/06/blog-the-rise-of-corporate-giants/index.md)
- [Structured JSON version](/en/blogs/articles/2018/06/06/blog-the-rise-of-corporate-giants/index.json)
- [Bundle manifest](/en/blogs/articles/2018/06/06/blog-the-rise-of-corporate-giants/bundle-manifest.json)

## Bibliographic details
- Authors: Federico J Dez, Daniel Leigh
- Published: June 6, 2018

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### Overview
- Authors: Federico J. Díez, Daniel Leigh
- Publication date: June 6, 2018
- Scope: Analysis based on an upcoming IMF working paper using data for publicly listed companies from 74 countries.
- Measure used: Average markups on goods and services across all companies (markup defined as the ratio of the price charged to the marginal cost of producing an additional unit).

### Key findings
- Markups in advanced economies:
  - Increased since the 1980s by 43 percent on average.
  - The upward trend has accelerated during the present decade.
- Markups in emerging market and developing economies:
  - Rose by 5 percent on average since 1990.
- Distributional pattern across firms:
  - Increase in markups in advanced economies is mostly driven by “superstar” firms that further increased their market power.
  - Markups in other firms have essentially been flat.
- Sectoral breadth:
  - The pattern of rising markups among superstar firms is found in all broad economic sectors, not just information and communication technology.

### Implications for investment, innovation, and labor
- Investment and innovation:
  - Starting from low levels, higher markups are initially associated with increasing investment and innovation.
  - This relationship becomes negative when market power becomes too strong.
  - The negative link between markups and investment and innovation is stronger in industries featuring higher degrees of market concentration.
- Labor share:
  - The paper finds a negative association in firms between labor shares and markups.
  - Implication: the labor share of income declines in industries where market power rises; the share of revenue going to profits increases.

### Policy considerations and open questions
- Drivers under debate (possible culprits listed in the source):
  - The rise of intangible assets such as software.
  - Network effects (when a product’s value to the user increases as the number of users of the product grows).
  - Weaker anti-trust enforcement.
- Policy implications depend on which factors are responsible for the increase in global market power.
- Recommendation: More research is needed to discriminate between the potential drivers.
- Convening: An upcoming conference, organized by the IMF, the World Bank, and the Organisation for Economic Co-operation and Development, will delve into corporate market power, competition policies, product market (de)regulation, and their macroeconomic effects.

### Related media
- Video mentioned: “Digitalization and the New Gilded Age” (presented during a seminar at the 2018 IMF-World Bank Spring Meetings).

*Source: Chart of the Week: The Rise of Corporate Giants, IMF blog, June 6, 2018.*

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## Content in this bundle

- **本周图表：企业巨头的崛起，作者：Federico J. Díezt 和Daniel Leigh，2018年6月6日**
  - [本周图表：企业巨头的崛起，作者：Federico J. Díezt 和Daniel Leigh，2018年6月6日 (Markdown version)](/external/chinese/np/blog/2018/060618c.pdf.md){rel="alternate" type="text/markdown"}
  - [本周图表：企业巨头的崛起，作者：Federico J. Díezt 和Daniel Leigh，2018年6月6日 (PDF)](/external/chinese/np/blog/2018/060618c.pdf){rel="external" type="application/pdf"}
- **今週のグラフ：巨大企業の台頭; フェデリコ・J・ディエス、ダニエル・リー, IMF ブログ 2018年6月6日掲載**
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  - [今週のグラフ：巨大企業の台頭; フェデリコ・J・ディエス、ダニエル・リー, IMF ブログ 2018年6月6日掲載 (PDF)](/external/japanese/np/blog/2018/060618j.pdf){rel="external" type="application/pdf"}
- **Диаграмма недели: возвышение корпоративных гигантов**
  - [Диаграмма недели: возвышение корпоративных гигантов (Markdown version)](/external/russian/np/blog/2018/060618r.pdf.md){rel="alternate" type="text/markdown"}
  - [Диаграмма недели: возвышение корпоративных гигантов (PDF)](/external/russian/np/blog/2018/060618r.pdf){rel="external" type="application/pdf"}

---

## References

- [Español,](https://blog-dialogoafondo.imf.org/?p=9326)
- [Português](http://www.imf.org/pt/News/Articles/2018/06/07/blog-the-rise-of-corporate-giants)
- [https://www.imf.org/wp-content/uploads/2018/06/BLOG-1024x600-IT-engineer-in-action-baranozdemir-iStock-147456329-1.jpg](https://www.imf.org/wp-content/uploads/2018/06/BLOG-1024x600-IT-engineer-in-action-baranozdemir-iStock-147456329-1.jpg)
- [concentration and market power](http://www.imf.org/external/mmedia/view.aspx?vid=5772879577001)
- [IMF working paper](http://www.imf.org/en/Publications/WP/Issues/2018/06/15/Global-Market-Power-and-its-Macroeconomic-Implications-45975)
- [https://www.imf.org/wp-content/uploads/2018/06/eng-may-30-cotw-corporategiants-1.png](https://www.imf.org/wp-content/uploads/2018/06/eng-may-30-cotw-corporategiants-1.png)

_Source: https://www.imf.org/en/blogs/articles/2018/06/06/blog-the-rise-of-corporate-giants_