Tsuyoshi Nakamura, Hiroshi Ohashi, 20 October 2020

Recent studies have shown average firm markups increasing in the US and other developed countries, driven by a small share of ‘superstar’ firms which have expanded their market shares and consolidated technological advantages. This column uses firm-level data to show that similar trends in markups are missing in Japan. In addition, intangible capital investments do not boost market power in the country. Instead, a strong predictor of average markup in Japan is firm age, with older firms enjoying significantly higher market power. 

Cecile Gaubert, Oleg Itskhoki, 14 August 2020

Large firms play a pivotal role in international trade, shaping, at least in parts, the export patterns of their home countries This column studies the role of such individual superstar firms and their specific know-how and managerial talent in determining a country’s comparative advantage. Guided by a framework it finds that in France, sectors with more superstar firms export more compared to average sectors. The contribution of superstar firms to exports is particularly pronounced in the most export-intensive sectors. However, over the medium to long run, exports of such sectors tend to fall faster and reverse to the mean.

Jens Südekum, Joel Stiebale, Nicole Woessner, 30 July 2020

The claim in a 2016 report from The Economist that a small group of ‘superstar firms’ were “once again dominating the global economy'' referred mostly to American internet giants, but recent research suggests that previous decades were more broadly characterised by a reallocation of market shares towards highly productive and profitable firms, with notable implications for competition, market power, and the income distribution. This column argues that a superstar firm pattern is also present in European manufacturing, and that it is considerably stronger in manufacturing branches in which industrial robots have been on the rise. Technological change seems to be a key driver for the emergence of superstar firms.

John Van Reenen, 19 July 2019

John Van Reenen discusses how 'superstar firms' such as Google and Apple have changed the global economy.

Ramy El-Dardiry, Bastiaan Overvest, Michiel Bijlsma, 24 May 2019

Digitalisation is transforming human life – from the way we interact with each other to the way we work, relax, and create. R&D within companies is no exception. This column lays out pathways for policymakers to successfully adapt R&D policies to these changes based on three guiding principles: direct policies towards spillovers, make policies technology-neutral, and do not favour superstars over challengers.

Meghana Ayyagari, Asli Demirgüç-Kunt, Vojislav Maksimovic, 08 October 2018

The emergence of ‘superstar’ firms that achieve vastly better returns on invested capital have led to concern that some sectors are too concentrated. The column argues that this difference in returns can be accounted for by better measurement of intangible capital. These firms may not be exercising market power in ways that harm consumers in the short run, but policymakers should ensure that markets remain contestable.

Dong Lou, 19 July 2018

Superstar firms like Facebook and Tesla make a substantial difference to overall industry productivity. In his research, Dong Lou asks whether they also impact students’ choices of degree majors. Using data on students' college major choices and the stock returns and media coverage of relevant companies in the US, he shows that firm performance had a positive effect on encouraging students to choose relevant majors. But the relevant labour demand in those industries has not risen accordingly, which has depressed wages.

Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 10 June 2018

To date there has been little systematic evidence on the role of firms in explaining country performance. This column explores how the products of firms from all over the globe fare in competition in the US market. Results show that the countries that capture larger market shares have more exporters, producing higher-quality products, with a more dispersed distribution of firm attributes. Larger and richer markets are characterised by a more dispersed distribution of sales and quality, and a higher incidence of superstar firms.

Christian Ebeke, Kodjovi Eklou, 19 January 2018

The economics profession has generally explained large movements in macroeconomic aggregates such as GDP or employment by shocks to other aggregates. This is in part due to the difficulty of translating micro or localised shocks into macro-relevant ‘news’. This column argues that idiosyncratic shocks at the biggest European firms are behind 40% percent of aggregate GDP fluctuations in Europe. These results have implications for the effectiveness of traditional demand-side policies in the fine-tuning of granular economies.

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