Superstar firms - more harm than good? ⭐️ Disputation

There is increasing evidence that, because of technological change and globalization, more and more companies nowadays have market power that they can exploit to their advantage. This raises several questions: Do these “superstar” companies undermine competition? Do they hold the wages of workers down? Do they endanger the prosperity of society? And if so, what can we do about it? Should we break the firms up into smaller companies, as many are demanding?
Our guests: Cristina Caffarra (Partner and Head of Keystone Europe), Jan Eeckhout (ICREA Professor of Economics at UPF Barcelona), Eliana Garcés (Director, Economic Policy at Meta (Facebook)); Moderation: Carolin Roth, business moderator & journalist
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Since 1980, the world economy has experienced an increase of dominant firms. Dominant firms face limited competition in their market and exert monopoly power. Why has this happened, and why did it start in 1980? The rise of dominant firms has a direct impact on customers who pay higher prices, but it also has far-reaching implications for the macroeconomy. Widespread market power leads to wage stagnation and a decline in the labor share, it increases wage inequality, it slows down business dynamism, it reduces the number of startup firms and lowers innovation.
In the public paper 'Dominant firms in the digital age', Jan Eeckhout reviews the determinants of the rise of dominant firms, discusses the causes and consequences, and proposes directions for policy solutions.
www.ubscenter.uzh.ch/en/publi...
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