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The Rise of Star Firms : Intangible Capital and Competition / Ayyagari, Meghana.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications")- Format:
- Book
- Government document
- Author/Creator:
- Ayyagari, Meghana.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Capital Investment.
- Competitiveness.
- Firm Productivity.
- Market Power.
- Private Sector Development.
- Private Sector Economics.
- Skilled Labor.
- Local Subjects:
- Capital Investment.
- Competitiveness.
- Firm Productivity.
- Market Power.
- Private Sector Development.
- Private Sector Economics.
- Skilled Labor.
- Physical Description:
- 1 online resource (63 pages)
- Other Title:
- Rise of Star Firms
- Place of Publication:
- Washington, D.C. : The World Bank, 2019.
- System Details:
- data file
- Summary:
- There is a divergence in the returns of top-performing firms and the rest of the economy, especially in industries that rely on a skilled labor force, raising concerns about their market power. This paper shows that the divergence is explained by the mismeasurement of intangible capital. Compared with other firms, star firms produce more per dollar of invested capital, have higher growth, innovation, and productivity and are not differentially affected by exogenous competitive shocks. Their pricing power supports their high intangible capital investment. Some exceptional firms may pose concerns due to their potential to foreclose competition in the future.
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