Foreign Firms & Dynamic Indicators of Competition

Carr, Joseph (2024) Foreign Firms & Dynamic Indicators of Competition. Doctoral thesis, University of East Anglia.

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Abstract

The tools economists and policymakers use to assess market competition often face fundamental limitations in their standard applications. For example, measuring market concentration without accounting for the largest firms provides limited insight. Similarly, any assessment of market power becomes incomplete if we do not identify which firms wield it and how long they can wield it for. This thesis demonstrates how overlooking these issues can lead to inaccurate conclusions about competition within a market. Specifically, we show that foreign firms frequently dominate as the largest firms within a market, and their accurate inclusion significantly raises the calculated level of market concentration. Additionally, we find that churn at the upper end of the sales distribution—the ability of firms to enter or exit the top ranks by market share—has been declining. This suggests that the firms with the greatest market power are maintaining their leading positions longer. Our analysis also reveals a relationship between market churn and other competition indicators. Highly concentrated markets and those with greater average markups tend to exhibit lower levels of churn. We further observe that large foreign firms tend to retain their top positions more persistently than domestic firms. By examining factors that influence a firm’s stability at a given rank, we find that higher productivity and markups contribute to sustaining a firm’s high market share.

Keywords: Producer Concentration, Seller Concentration, Competition, HHI. JEL classifiers: International Trade, Industrial Organisation.

Item Type:	Thesis (Doctoral)
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	Chris White
Date Deposited:	17 Feb 2025 13:20
Last Modified:	17 Feb 2025 13:20
URI:	https://ueaeprints.uea.ac.uk/id/eprint/98516
DOI:

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