Competition, market concentration and intangibles in the United States
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2021-07-30
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en
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Abstract
Recent decades have seen profound technological and, flowing from this, economic
and business changes. The rise of Information Technology and other intangible assets have
changed how economies and businesses look. At the same time, (related) debates about
competition and market power have become more prominent in the U.S. public debate. This
paper has two aims. First, it (graphically) investigates the developments of the level of
competition in the United States economy between 1987-2017 by employing a commonly
used measure of industry concentration as a proxy for the level of competition, looking at
seventy U.S. industries. Second, it is explored what role intangible assets play in these
developments. A panel fixed effects is used to empirically determine the effect of intangible
assets on the level of competition (i.e., market concentration) in the U.S. Results showed a
strong decline of industry concentration. The panel estimations showed a significant and
negative effect of intangibles on concentration, which is robust to various intangibility and
concertation measures, indicating that higher intangible intensity might lead to lower
concentration. Despite this, results are limited by the inclusion of only public firms, which
could lead to biases in the dataset as, over time, already existing private firms go public.
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Faculteit der Managementwetenschappen