Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214231
Authors: 
Schiersch, Alexander
Stiel, Caroline
Year of Publication: 
2020
Series/Report no.: 
DIW Discussion Papers No. 1849
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
The superstar firms model provides a compelling explanation for two simultaneously occurring phenomena: the rise of concentration in industries and the fall of labor shares. Our empirical analysis confirms two of the underlying assumptions of the model: the market share increases and the labor share decreases with increasing firm-level total factor productivity, providing support for the superstar firms' hypothesis. However, we find no evidence for the underlying mechanism of the model, the distribution of fixed labor costs. Instead, we observe increasing returns to scale that also explain lower labor shares of larger firms.
Subjects: 
superstar firms
total factor productivity
labor share
market share
firm size
JEL: 
D24
E20
L11
Document Type: 
Working Paper

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