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Global Market Power

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  • De Loecker, Jan
  • Eeckhout, Jan

Abstract

To date, little is known about the evolution of market power for the economies around the world. We extract data from the financial statements of over 70,000 firms in 134 countries, and we analyze and document the evolution of markups over the last four decades. We show that the average global markup has gone up from close to 1.1 in 1980 to around 1.6 in 2016. Markups have risen most in North America and Europe, and least in emerging economies in Latin America and Asia. We discuss the distributional implications of the rise in global market power for the labor share and for the profit share.

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  • De Loecker, Jan & Eeckhout, Jan, 2018. "Global Market Power," CEPR Discussion Papers 13009, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13009
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    Cited by:

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    2. Corrado, Carol & Haskel, Jonathan & Jona-Lasinio, Cecilia, 2019. "Productivity growth, capital reallocation and the financial crisis: Evidence from Europe and the US," Journal of Macroeconomics, Elsevier, vol. 61(C), pages 1-1.
    3. Mertens, Matthias, 2020. "Labor market power and the distorting effects of international trade," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    4. Alfaro, Martín, 2020. "Market structures in small open economies: Evidence from Denmark," Research in Economics, Elsevier, vol. 74(4), pages 363-378.
    5. Hollenbeck, Brett & Giroldo, Renato, 2020. "Winning Big: Scale and Success in Retail Entrepreneurship," MPRA Paper 100766, University Library of Munich, Germany.
    6. Dennery, Charles, 2020. "Monopsony with nominal rigidities: An inverted Phillips Curve," Economics Letters, Elsevier, vol. 191(C).
    7. Aquilante, Tommaso & Chowla, Shiv & Dacic, Nikola & Haldane, Andrew & Masolo, Riccardo & Schneider, Patrick & Seneca, Martin & Tatomir, Srdan, 2019. "Market power and monetary policy," Bank of England working papers 798, Bank of England.

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    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • K0 - Law and Economics - - General
    • L0 - Industrial Organization - - General

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