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Intangibles and industry concentration: Supersize me

Author

Listed:
  • Matej Bajgar

    (Center for Economic Research and Graduate Education - Economics Institute)

  • Chiara Criscuolo

    (OECD)

  • Jonathan Timmis

    (The World Bank)

Abstract

This paper presents new evidence on the growing scale of big businesses in the United States, Japan, and Europe. It finds broad evidence of rising industry concentration across the majority of countries and sectors over the period 2002 to 2014. Rising concentration is strongly associated with intensive investment in intangibles, particularly innovative assets, software, and data. This relationship appears to be stronger in more globalised and digital-intensive industries. The results are consistent with intangibles disproportionately benefiting large firms and enabling them to scale up and increase market shares. We find nuanced implications of these new business models for competition – rising markups and reduced churning amongst the top firms, but falling industry prices.

Suggested Citation

  • Matej Bajgar & Chiara Criscuolo & Jonathan Timmis, 2021. "Intangibles and industry concentration: Supersize me," OECD Science, Technology and Industry Working Papers 2021/12, OECD Publishing.
    • Handle: RePEc:oec:stiaaa:2021/12-en
    DOI: 10.1787/ce813aa5-en
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    Cited by:

    1. Cristiano Antonelli & Gianluca Orsatti & Guido Pialli, 2023. "The effects of the limited exhaustibility of knowledge on firm size and the direction of technological change," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1359-1385, August.
    2. Luca Fontanelli, 2023. "Theories of market selection: a survey," LEM Papers Series 2023/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Peter Goodridge & Jonathan Haskel, 2023. "Accounting for the slowdown in UK innovation and productivity," Economica, London School of Economics and Political Science, vol. 90(359), pages 780-812, July.
    4. von Maydell, Richard, 2024. "Artificial Intelligence and its Effect on Competition and Factor Income Shares," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277654, Verein für Socialpolitik / German Economic Association, revised 2024.
    5. Fontanelli, Luca & Guerini, Mattia & Napoletano, Mauro, 2023. "International trade and technological competition in markets with dynamic increasing returns," Journal of Economic Dynamics and Control, Elsevier, vol. 149(C).
    6. Garnadt, Niklas & von Rueden, Christina & Thiel, Esther, 2021. "Labour reallocation dynamics in Germany during the COVID-19 pandemic and past recessions," Working Papers 08/2021, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    7. Marek Pekarčík & Júlia Ďurčová & Jozef Glova, 2022. "Intangible ICT and Their Importance within Global Value Chains: An Empirical Analysis Based on Longitudinal Data Regression," Mathematics, MDPI, vol. 10(7), pages 1-14, April.

    More about this item

    Keywords

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    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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