Stagnation of markups and (non-)existence of superstar firms in Japan
Recent studies show average firm markups increasing in america and other developed countries, driven by a little share of ‘superstar’ firms that have expanded their market shares and consolidated technological advantages. This column uses firm-level data showing that similar trends in markups are missing in Japan. Furthermore, intangible capital investments usually do not boost market power in the united states. Instead, a solid predictor of average markup in Japan is firm age, with older firms enjoying significantly higher market power.