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From Good to Bad Concentration? U.S. Industries over the Past 30 Years

Matias Covarrubias, Germán Gutiérrez, Thomas Philippon


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book NBER Macroeconomics Annual 2019, volume 34, Martin S. Eichenbaum, Erik Hurst, and Jonathan A. Parker, editors
Conference held April 11-12, 2019
Forthcoming from University of Chicago Press
in NBER Book Series NBER Macroeconomics Annual

We study the evolution of profits, investment and market shares in US industries over the past 40 years. During the 1990’s, and at low levels of initial concentration, we find evidence of efficient concentration driven by tougher price competition, intangible investment, and increasing productivity of leaders. After 2000, however, the evidence suggests inefficient concentration, decreasing competition and increasing barriers to entry, as leaders become more entrenched and concentration is associated with lower investment, higher prices and lower productivity growth.

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This chapter first appeared as NBER working paper w25983, From Good to Bad Concentration? U.S. Industries over the past 30 years, Matias Covarrubias, Germán Gutiérrez, Thomas Philippon
Commentary on this chapter:
  Comment, Janice C. Eberly
  Comment, Chad Syverson
 
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