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Cited by 308Merger and Competition AnalysisGlobal trade and economicsEconomic Theory and Policy

“Global Market Power”

Open access
De Loecker, Jan, Eeckhout, Jan·2018·National Bureau of Economic Research
DOI 10.3386/w24768
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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.

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Crossref · 10.3386/w24768

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  • Profits as a share of sales across the economy have increased, and the share of value added allocated to labor has declined.

    “The result has been an increase in profits as a share of sales across the economy, as well as a declining share of value added that is allocated to labor (e.g., Akcigit et al. 2021; De Loecker et al. 2020; De Loecker and Eeckhout 2018; Weber and Wasner 2023).”

    From Corporate concentration and power matter for agency in food systems (2025) · cites this paper as De Loecker and Eeckhout 2018

    In the passages labeled “GLOBAL MARKET POWER > Abstract” (page unavailable), the paper links rising markups to a lower labor share and reports that market value relative to sales—a proxy for profitability—rose during periods of increasing markups. It does not directly establish an economy-wide increase in profits divided by sales, and its stated labor-share measure is labor expenditure divided by sales, not value added. (LLM, conf=0.85)

    Experimental — accuracy not yet measured

  • Concentrated firms can shape the contours of markets in ways that enable them to earn higher profits than they would in a more competitive market, fueling inequities.

    “It is well established in the economics literature that concentrated firms can shape the contours of markets in ways that enable them to earn higher profits than they would in a more competitive market, fueling inequities (De Loecker and Eeckhout 2018; Ennis et al. 2019).”

    From Corporate concentration and power matter for agency in food systems (2025) · cites this paper as De Loecker and Eeckhout 2018

    The paper’s Abstract says that firms with market power can charge higher prices, earn a higher profit share, and shift resources from workers and consumers to firm owners. It does not establish that concentrated firms shape markets to achieve this; the same section cautions that concentration is not a reliable proxy for market power when products are differentiated. No page number is available in our copy. (LLM, conf=0.86)

    Experimental — accuracy not yet measured

  • The rise in weighted average markup appears largely driven by a reallocation of sales and value-added towards firms with high markups (and low labor shares).

    “This pattern appears largely driven by a reallocation of sales and value-added towards firms with high markups (and low labor shares).”

    From The Fall of the Labor Share and the Rise of Superstar Firms* (2020) · cites this paper as de Loecker and Eeckhout, 2018

    The markup analysis (Figure 1 and Figure 2 discussion; page not supplied) reports a rising sales-weighted average and substantially more firms with high markups. The labor-share discussion says labor’s share decreases as markups increase, but also says the firm-level data cannot establish that relationship empirically. Our copy does not show that reallocation of sales or value-added toward high-markup firms largely drove the rise. (LLM, conf=0.85)

    Experimental — accuracy not yet measured

  • On average across countries, the weighted average markup has risen.

    “On average across countries, the weighted average markup has risen.”

    From The Fall of the Labor Share and the Rise of Superstar Firms* (2020) · cites this paper as de Loecker and Eeckhout, 2018

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Authors
De Loecker, J., & Eeckhout, J.
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2018-06
DOI
10.3386/w24768
OpenAlex
W2810366719
Cited by
308
References
18
Citations by year
2026: 24 · 2025: 49 · 2024: 40 · 2023: 28 · 2022: 30 · 2021: 56 · 2020: 47 · 2019: 24 · 2018: 8 · 2017: 2
Type
report
Language
en
Open access
Locations
  • National Bureau of Economic Research (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • National Bureau of Economic Research (submittedVersion)
Funders
  • Fonds Wetenschappelijk Onderzoek
  • FP7 Ideas: European Research Council (339186)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
Keywords
market power, markups, financial statements, firm-level data, labor share, profit share, distributional effects, emerging markets, North America, Europe, Latin America, Asia

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