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From Good to Bad Concentration? U.S. Industries over the past 30 years

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  • Matias Covarrubias
  • Germán Gutiérrez
  • Thomas Philippon

Abstract

We study the evolution of profits, investment and market shares in US industries over the past 40 years. During the 1990’s, and at low levels of initial concentration, we find evidence of efficient concentration driven by tougher price competition, intangible investment, and increasing productivity of leaders. After 2000, however, the evidence suggests inefficient concentration, decreasing competition and increasing barriers to entry, as leaders become more entrenched and concentration is associated with lower investment, higher prices and lower productivity growth.

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  • Matias Covarrubias & Germán Gutiérrez & Thomas Philippon, 2019. "From Good to Bad Concentration? U.S. Industries over the past 30 years," NBER Working Papers 25983, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25983
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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • K0 - Law and Economics - - General
    • L0 - Industrial Organization - - General

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