Discussion paper

DP16570 Barriers to Creative Destruction: Large Firms and Non-Productive Strategies

This chapter reviews recent empirical evidence on large firms and non-productive
strategies that hinder creative destruction and reallocation. The focus is on three
types of non-productive strategies: political connections, non-productive patenting,
and anti-competitive acquisitions. Across different contexts using granular micro
data sets, we overwhelmingly see that as firms gain market shares, they rely more
on non-productive strategies but reduce their productive, innovation-based strategies.
I discuss theoretical channels, aggregate implications, and potentials for some
policies.

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Citation

Baslandze, S (2021), ‘DP16570 Barriers to Creative Destruction: Large Firms and Non-Productive Strategies‘, CEPR Discussion Paper No. 16570. CEPR Press, Paris & London. https://cepr.org/publications/dp16570