Corporate Inequality: Role of Competition and Institutions
In this working paper for the
Center forGlobal Development, Meghana Ayyagari, Asli Demirguc-Kunt, and VojislavMaksimovic analyze micro panel data from over 70 countries to explain thepresence and behavior of star firms, defined as the top 10 percentile of firmsin terms of return on invested capital. While star firms are more likely tooccur in high-income countries and manufacturing industry, there is anincreasing share of star firms from middle-income countries and the servicessector. The results do not suggest that star firms are differentially protectedfrom trade shocks or that they restrict output and investment as in traditionalmonopolies.
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