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Product Market Competition and its Implications for the Australian Economy

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  • Jonathan Hambur

Abstract

This paper documents firm mark‐ups and competition in Australia, and their impact on productivity, using administrative data. I find that mark‐ups increased by around 5 per cent since the mid 2000s, less than previously documented for Australia and slightly less than documented for the average advanced economy. While part appears to reflect technological change, part appears to reflect an increase in market power. This increase appears to explain part of the slowdown in productivity growth observed in Australia over the past decade, by slowing the efficient reallocation of resources from low productivity to high productivity firms.

Suggested Citation

  • Jonathan Hambur, 2023. "Product Market Competition and its Implications for the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 99(324), pages 32-57, March.
    • Handle: RePEc:bla:ecorec:v:99:y:2023:i:324:p:32-57
    DOI: 10.1111/1475-4932.12707
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    References listed on IDEAS

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    Cited by:

    1. Joel Bowman & Jonathan Hambur & Nathan Markovski, 2024. "Examining the Macroeconomic Costs of Occupational Entry Regulations," RBA Research Discussion Papers rdp2024-06, Reserve Bank of Australia.
    2. Monique Champion & Chris Edmond & Jonathan Hambur, "undated". "Competition, Markups, and Inflation: Evidence from Australian Firm-level Data," RBA Annual Conference Papers acp2023-05, Reserve Bank of Australia, revised Nov 2023.

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