100 Years of Rising Corporate Concentration

108 Pages Posted: 11 Oct 2021 Last revised: 8 Feb 2023

See all articles by Spencer Yongwook Kwon

Spencer Yongwook Kwon

Harvard University

Yueran Ma

University of Chicago - Booth School of Business

Kaspar Zimmermann

Leibniz Institute for Financial Research SAFE

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Date Written: February 7, 2023

Abstract

We collect data on the size distribution of all U.S. corporations for 100 years. We document that corporate concentration (e.g., asset share or sales share of top businesses) has increased persistently over the past century. Rising concentration was stronger in manufacturing and mining before the 1970s, and stronger in services, retail, and wholesale after the 1970s. Furthermore, rising concentration in an industry aligns with greater technological intensity and more fixed costs. Industries with higher increases in concentration also exhibit higher output growth. Among the leading hypotheses for rising concentration, stronger economies of scale appear consistent with the long-run trends.

Keywords: Corporate concentration, economies of scale

JEL Classification: E23, E01, N12

Suggested Citation

Kwon, Spencer Yongwook and Ma, Yueran and Zimmermann, Kaspar, 100 Years of Rising Corporate Concentration (February 7, 2023). SAFE Working Paper No. #359, Available at SSRN: https://ssrn.com/abstract=3936799 or http://dx.doi.org/10.2139/ssrn.3936799

Spencer Yongwook Kwon

Harvard University

1875 Cambridge Street
Cambridge, MA 02138
United States

Yueran Ma (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Kaspar Zimmermann

Leibniz Institute for Financial Research SAFE ( email )

Frankfurt am Main
Germany

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