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