Directorate for Science, Technology and Innovation
Intangibles and industry concentration
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This paper presents new evidence on the growing scale of big businesses in the United
States, Japan, and Europe. It finds broad evidence of rising industry concentration
across the majority of countries and sectors over the period 2002 to 2014. Rising
concentration is strongly associated with intensive investment in intangibles, particularly
innovative assets, software, and data. This relationship appears to be stronger in
more globalised and digital-intensive industries. The results are consistent with
intangibles disproportionately benefiting large firms and enabling them to scale up
and increase market shares. We find nuanced implications of these new business models
for competition – rising markups and reduced churning amongst the top firms, but falling
industry prices.
Published on September 22, 2021
In series:OECD Science, Technology and Industry Working Papersview more titles