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Rising Corporate Market Power: Emerging Policy Issues

Author

Listed:
  • Ms. Wenjie Chen
  • Mr. Federico J Diez
  • Mr. Romain A Duval
  • Philipp Engler
  • Jiayue Fan
  • Chiara Maggi
  • Ms. Marina Mendes Tavares
  • Mr. Daniel A Schwarz
  • Mr. Ippei Shibata
  • Carolina Villegas-Sánchez

Abstract

Corporate market power has risen in recent decades, and new estimates in this note suggest that the likely wave of small and medium-sized enterprise bankruptcies from the ongoing pandemic will further strengthen market concentration. Whether and how policymakers should address this issue is hotly debated. This note provides new evidence on the policy relevance of rising market power and highlights possible implications for the design of competition policy frameworks and macroeconomic policies.

Suggested Citation

  • Ms. Wenjie Chen & Mr. Federico J Diez & Mr. Romain A Duval & Philipp Engler & Jiayue Fan & Chiara Maggi & Ms. Marina Mendes Tavares & Mr. Daniel A Schwarz & Mr. Ippei Shibata & Carolina Villegas-Sánch, 2021. "Rising Corporate Market Power: Emerging Policy Issues," IMF Staff Discussion Notes 2021/001, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2021/001
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    Citations

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    Cited by:

    1. Kosuke Aoki & Yoshihiko Hogen & Kosuke Takatomi, 2023. "Price Markups and Wage Setting Behavior of Japanese Firms," Bank of Japan Working Paper Series 23-E-5, Bank of Japan.
    2. Bobeica, Elena & Ciccarelli, Matteo & Vansteenkiste, Isabel, 2021. "The changing link between labor cost and price inflation in the United States," Working Paper Series 2583, European Central Bank.
    3. Gábor Koltay & Szabolcs Lorincz & Tommaso Valletti, 2023. "Concentration and Competition: Evidence From Europe and Implications For Policy1," Journal of Competition Law and Economics, Oxford University Press, vol. 19(3), pages 466-501.
    4. Hashmat Khan & Konstantinos Metaxoglou, 2021. "The Behavior of the Aggregate U.S. Wage Markdown," Carleton Economic Papers 21-06, Carleton University, Department of Economics.
    5. 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.
    6. Comisión Nacional de los Mercados y la Competencia (CNMC), 2023. "Guide. Competition against inflation: How competition and efficient regulation help protect the purchasing power of consumers," Colección Estudios de Mercado G-2022-02_ENG, Comisión Nacional de los Mercados y la Competencia (CNMC).
    7. Mydland, Ørjan & Størdal, Ståle & Kumbhakar, Subal C. & Lien, Gudbrand, 2022. "Modeling markups and its determinants: The case of Norwegian industries and regions," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 252-262.
    8. Balisacan, Arsenio M. & dela Cruz, Russel Matthew M., 2021. "When a Pandemic Strikes: Balancing Health and Economy toward Sustainable and Inclusive Recovery," MPRA Paper 111259, University Library of Munich, Germany.
    9. Agustin Velasquez, 2023. "Production Technology, Market Power, and the Decline of the Labor Share," IMF Working Papers 2023/032, International Monetary Fund.
    10. Bats, Joost & Greif, William & Kapp, Daniel, 2022. "The rise in the cross-sectoral dispersion of earnings expectations during COVID-19," Working Paper Series 2664, European Central Bank.
    11. Yue Li & Kuo,Ryan Chia & Pinzon Latorre,Mauricio Alejandro & Albertson,Mark Peter, 2022. "FDI, Market Power, and Markups : Evidence from Vietnam," Policy Research Working Paper Series 9998, The World Bank.
    12. Diego A. Cerdeiro & Cian Ruane, 2024. "China's declining business dynamism," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(3), pages 726-752, August.
    13. Renzhi, Nuobu & Beirne, John, 2023. "Corporate market power and monetary policy transmission in Asia," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    14. Gábor Koltay & Szabolcs Lorncz & Tommaso M. Valletti, 2022. "Concentration and Competition: Evidence from Europe and Implications for Policy," CESifo Working Paper Series 9640, CESifo.
    15. Lancieri, Filippo Maria & Valleti, Tommaso, 2024. "Towards an effective merger review policy: A defence of rebuttable structural presumptions," Working Papers 345, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.

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