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Kicking a Crude Habit: Diversifying Away from Oil and Gas in the 21st Century

Author

Listed:
  • Caroline Freund

    () (Peterson Institute for International Economics)

  • Dario Sidhu

    () (Peterson Institute for International Economics)

Abstract

Using firm level data, the authors examine how global industrial concentration has changed over the last decade in relation to the rise of China. Between 2006 and 2014, global concentration has declined in most industries and is falling on average across all industries, while firms at the top of the distribution are experiencing significant churning. The resulting enhanced industrial competition is partly attributable to the rising market shares of firms from China and other emerging markets at the expense of incumbent industry leaders. The authors further show evidence of global allocative efficiency—highly productive firms tend to be larger and grow faster. Global concentration has, however, risen significantly in several industries where Chinese state-owned enterprises (SOEs) dominate, and China’s SOEs are on average too large and expanding too fast given their low levels of productivity.

Suggested Citation

  • Caroline Freund & Dario Sidhu, 2017. "Kicking a Crude Habit: Diversifying Away from Oil and Gas in the 21st Century," Working Paper Series WP17-3, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp17-3
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    More about this item

    Keywords

    big business; multinational enterprise; state-owned enterprise; concentration;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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