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Market power, output, and productivity

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  • Rivera-Padilla, Alberto

Abstract

I document a positive correlation between increases in markups and growth of output, value added, and labor productivity at the 3-digit sector level using national accounts data from Mexico. Additionally, I show that those results can be partly accounted for by the positive correlation between increases in markups and total factor productivity growth. Taken together, the findings provide new evidence that a rise of market power can be associated with positive welfare effects and not only with negative outcomes of reduced competition.

Suggested Citation

  • Rivera-Padilla, Alberto, 2023. "Market power, output, and productivity," Economics Letters, Elsevier, vol. 232(C).
    • Handle: RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003439
    DOI: 10.1016/j.econlet.2023.111318
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    More about this item

    Keywords

    Markups; Market power; Productivity; Growth;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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