Working Paper: CEPR ID: DP13009
Authors: Jan Eeckhout; Jan De Loecker
Abstract: 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.
Keywords: markups; market power; global; labor share; profits
JEL Codes: L1; L2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| time (years) (C41) | average global markup (D49) |
| increased market power (D43) | average global markup (D49) |
| average global markup (D49) | labor share (D33) |
| increased market power (D43) | labor share (D33) |
| average global markup (D49) | profit share (D33) |