Global Market Power
To date, little is known about the evolution of market power for the economies around the world. We extract data from the financial statements of over 70,000 firms in 134 countries, and we analyze and document the evolution of markups over the last four decades. We show that the average global markup has gone up from close to 1.1 in 1980 to around 1.6 in 2016. Markups have risen most in North America and Europe, and least in emerging economies in Latin America and Asia. We discuss the distributional implications of the rise in global market power for the labor share and for the profit share.
Shubhdeep Deb provided invaluable research assistance. De Loecker gratefully acknowledges support from the FWO Odysseus Grant and Eeckhout from the ERC, Advanced grant 339186, and from ECO2015-67655-P. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.