Global Declining Competition

Using a new firm-level dataset on private and listed firms from 20 countries, we documentfive stylized facts on market power in global markets. First, competition has declinedaround the world, measured as a moderate increase in average firm markups during 2000-2015. Second, the markup increase is driven by already high-markup firms (top decile ofthe markup distribution) that charge increasing markups. Third, markups increased mostlyamong advanced economies but not in emerging markets. Fourth, there is a non-monotonicrelation between firm size and markups that is first decreasing and then increasing. Finally,the increase is mostly driven by increases within incumbents and also by market sharereallocation towards high-markup entrants.