Discussion Paper Details
Please find the details for DP12536 in an easy to copy and paste format below:
Title: Declining Competition and Investment in the U.S.
Author(s): German Gutierrez and Thomas Philippon
Publication Date: December 2017
Keyword(s): Concentration, investment and Markups
Programme Area(s): Industrial Organization and Macroeconomics and Growth
Abstract: We argue that the increasing concentration of US industries is not an efficient response to changes in technology and reflects instead decreasing domestic competition. Concentration has risen in the U.S. but not in Europe; concentration and productivity are negatively related; and industry leaders cut investment when concentration increases. We then establish the causal impact of competition on investment using Chinese competition in manufacturing, noisy entry in the late 1990s, and discrete jumps in concentration following large M&As. We find that more (less) competition causes more (less) investment, particularly in intangible assets and by industry leaders.
For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12536
Gutierrez, G and Philippon, T. 2017. 'Declining Competition and Investment in the U.S.'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12536