Data and Code for: Market Power and Innovation in the Intangible Economy
Principal Investigator(s): View help for Principal Investigator(s) Maarten De Ridder, London School of Economics
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| BursteinCarvalhoGrassi | 07/19/2023 11:50:AM | ||
| code | 07/19/2023 11:53:AM | ||
| figures | 07/19/2023 11:54:AM | ||
| outputdata | 07/19/2023 11:50:AM | ||
| packages | 07/19/2023 11:54:AM | ||
| sascode | 07/19/2023 11:54:AM | ||
| tables | 07/19/2023 11:54:AM |
Project Description
Summary:
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This paper offers a unified explanation for the slowdown of productivity growth, the decline in business dynamism and the rise of market power. The increasing use of intangible inputs – such as software – explains these trends because it causes a shift from variable costs towards fixed costs, which changes the way that firms produce and compete. I develop a quantitative framework with heterogeneous firms and endogenous productivity growth in which intangibles reduce marginal costs and raise fixed costs, which gives firms with high-intangible adoption a competitive advantage. This advantage deters other firms from entering new markets and lowers the overall rate of creative destruction.
Scope of Project
Subject Terms:
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innovation;
market power
JEL Classification:
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O40 Economic Growth and Aggregate Productivity: General
O40 Economic Growth and Aggregate Productivity: General
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