My best attempt at an overview of the corporate concentration issue, from a recent piece:
The basic facts are these: Most industries in the U.S. have grown more concentrated, meaning the largest firms account for a larger share of revenue. At the same time, corporate profits have reached all-time highs, despite lackluster rates of business investment. And the number of new businesses being founded has declined; the number of new growth startups being founded has risen, yet these firms struggle to scale. The cause of these trends is not clear. Theories include the rise of IT and the network effects it creates, less-rigorous antitrust enforcement, and lobbying and excess regulation.
And a reading list (I’ll try and update it, and let me know what I’ve missed):
The Pro Market blog at the Stigler Center has been excellent on this. Here are a few examples:
Economists: “Totality of Evidence” Underscores Concentration Problem in the U.S.
The Rise of Market Power and the Decline of Labor’s Share
Is the Digital Economy Much Less Competitive Than We Think It Is?
So has the Washington Center for Equitable Growth.
Market power in the U.S. economy today
Is declining competition causing slow U.S. business investment growth?
U.S. antitrust and competition policy amid the new merger wave
A communications oligopoly on steroids: Why antitrust enforcement and regulatory oversight in digital communications matter
New federal antitrust legislation recognizes U.S. workers are not only consumers
Unlocking the promise of antitrust enforcement (conference recap, with videos)
The New America Foundation’s Open Markets program is focused on this:
(update: New America and the Open Markets program have parted ways)
Amazon’s Antitrust Paradox
The Economist has done several great pieces:
The problem with profits
Too much of a good thing
A giant problem
The rise of the superstars
So has The Atlantic:
America’s Monopoly Problem
America’s Monopolies Are Holding Back the Economy
So has ProPublica:
The American Way
These Professors Make More Than a Thousand Bucks an Hour Peddling Mega-Mergers
This is a great piece from Fivethirtyeight on the state of startups:
The Next Amazon (Or Apple, Or GE) Is Probably Failing Right Now
Neil Irwin on winner-take-all at The Upshot:
The Amazon-Walmart Showdown That Explains the Modern Economy
Noah Smith at Bloomberg and on his blog:
Monopolies Are Worse Than We Thought
The Market Power Story
America’s Superstar Companies Are a Drag on Growth
Tyler Cowen on rising markups: “the whole story just doesn’t add up”:
The Rise of Market Power
Productivity and market power in general equilibrium
Intangible investment and monopoly profits
More on the rising markups paper (linked below):
Larry Summers comments:
“I’m not certain”
Joe Stiglitz has a big piece in The Nation:
America Has a Monopoly Problem
Litan and Hathaway on decline of new business formation:
Declining Business Dynamism in the United States: A Look at States and Metros
Jason Furman was involved in two papers on this topic:
A Firm-Level Perspective on the Role of Rents in the Rise in Inequality
BENEFITS OF COMPETITION AND INDICATORS OF MARKET POWER
Vox’s Matt Yglesias and Ezra Klein did a podcast on this:
Justin Fox on winner-take-all industries and firm lifespans:
America’s Most Winner-Take-All Industry, Visualized
The Fall, Rise and Fall of Creative Destruction
Greg Ip at WSJ:
A Provocative Look at the Harm From Corporate Heft
McKinsey on winner-take-all dynamics in manufacturing:
Making it in America
The Democrats Confront Monopoly
Are U.S. Industries Becoming More Concentrated?
The Fall of the Labor Share and the Rise of Superstar Firms
Declining Competition and Investment in the U.S.
The Rise of Market Power and the Macroeconomic Implications
(have not read yet, but…) Oligopolies, Prices, and Quantities
(have not yet watched) Rise of Monopoly Power in the U.S.
An interesting anonymous contribution, via Tyler Cowen
Large U.S. firms have always commanded monopolistic rents–think Dupont, Bethlehem Steel, IBM, GM/Ford/Chrysler in their respective heydays. However, several developments have worked to dramatically change how those rents are shared. Before the 1980s shareholder revolution, monopolistic rents of dominant firms were more broadly shared–not just with rank and file employees but with the local community. (link)
We’ve done tons at HBR on this…
…are firms failing faster?
The Biology of Corporate Survival
The Scary Truth About Corporate Survival
(not HBR but see also the last quote)
…on startups being started but not scaling:
The U.S. Startup Economy Is in Both Better and Worse Shape than We Thought
…on superstar firms, and the pay inequality that comes with them:
Productivity Is Soaring at Top Firms and Sluggish Everywhere Else
A Study of 16 Countries Shows That the Most Productive Firms (and Their Employees) Are Pulling Away from Everyone Else
Research: The Rise of Superstar Firms Has Been Better for Investors than for Employees
Corporate Inequality is the Defining Fact of Business Today
Corporations in the Age of Inequality
Investing in the IT That Makes a Competitive Difference
…on digital firms pulling ahead:
The Real Reason Superstar Firms Are Pulling Ahead
The Most Digital Companies Are Leaving All the Rest Behind
What the Companies on the Right Side of the Digital Business Divide Have in Common
Managing Our Hub Economy
(see also several of the items in the superstar section above)
…an interview with Jason Furman:
Competition Is on the Decline, and That’s Fueling Inequality
Mergers May Be Profitable, but Are They Good for the Economy?
As More People Worry About Monopolies, an Economist Explains What Antitrust Can and Can’t Do
…on antitrust, data, and AI:
How Pricing Bots Could Form Cartels and Make Things More Expensive
Should Antitrust Regulators Stop Companies from Collecting So Much Data?
…on lobbying and rent-seeking:
Lobbyists Are Behind the Rise in Corporate Profits
…on common ownership:
One Big Reason There’s So Little Competition Among U.S. Banks
Warren Buffett Is Betting the Airline Oligopoly Is Here to Stay
…on big companies paying more than small ones, but less so than they used to:
Big Companies Don’t Pay As Well As They Used To
…and trying to sum it all up:
Making Sense of Our Very Competitive, Super Monopolistic Economy
Loosely related stuff, on productivity, inequality, etc.
Cloud computing and young firm survival
Productivity and IT in Italy
NBER on innovation and inequality: here, here.
AI and productivity, here and here. And robots.
A new paper on the decline of entrepreneurship.
Good overview on antitrust and how competition relates to innovation.