Since 2000, fewer and fewer companies have come to control larger and larger shares of the market in a wide variety of industries. In fact, 75% of US industries have experienced a rise in concentration over that period. What does this mean for competition across the economy and in individual sectors, and is it detrimental or beneficial to the economy?
In the eighth episode of The Flip Side, Head of Research Jeff Meli and Senior US Economist Jonathan Millar examine the intensity of concentration in the US economy through trends in labour’s share of income, corporate profits, business dynamism and investment since the turn of the millennium.
They debate whether the dominant dynamic behind these trends is linked to one of two hypotheses about competition: 1) market power, when companies use their market share to extract additional profits by raising consumer prices, holding down wages or discouraging market entrants, or 2) winner-take-all, where companies amass market share as a side-effect of increased competition through innovation, productivity gains and efficiency.
For more information on this topic, download a copy of our fifth Impact Series report, Increased corporate concentration and the influence of market power (PDF, 2.4MB).
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This podcast series features lively debates between Barclays’ Research analysts on important topics facing economies and businesses around the globe.