We examine the relationship between competition (or market concentration) of industries on the one hand and productivity of individual companies and entire industries on the other. Emphasis is put on the empirical evidence of two theoretically motivated channels of cause. On the one hand, as a result of weaker competition, a static effect leads to a lower quantity produced and thus to higher unit costs. On the other hand, a dynamic effect via cost-reducing process innovation is expected to have a long-term effect on the development of firm and industry productivity.
Bertelsmann Stiftung, Gütersloh, DE
01.04.2019 - 31.12.2019