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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