Market power and innovation in the intangible economy
By: Ridder, Maarten De
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Material type: 
BookPublisher: The American Economic Review Description: 114(1), Jan, 2024: p.199-251.Subject(s): Production, Pricing, and Market Structure; Size Distribution of Firms
In:
The American Economic ReviewSummary: This paper offers a unified explanation for the slowdown of productivity growth, the decline in business dynamism, and the rise of market power. Using a quantitative framework, I show that the rise of intangible inputs, such as software, can explain these trends. Intangibles reduce marginal costs and raise fixed costs, which gives firms with high-intangible adoption a competitive advantage, in turn deterring other firms from entering. I structurally estimate the model on French and US micro data. After initially boosting productivity, the rise of intangibles causes a decline in productivity growth, consistent with the empirical trends observed since the mid-1990s.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20201079
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 114(1), Jan, 2024: p.199-251 | Available | AR131333 |
This paper offers a unified explanation for the slowdown of productivity growth, the decline in business dynamism, and the rise of market power. Using a quantitative framework, I show that the rise of intangible inputs, such as software, can explain these trends. Intangibles reduce marginal costs and raise fixed costs, which gives firms with high-intangible adoption a competitive advantage, in turn deterring other firms from entering. I structurally estimate the model on French and US micro data. After initially boosting productivity, the rise of intangibles causes a decline in productivity growth, consistent with the empirical trends observed since the mid-1990s.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20201079
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