Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314176 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 25 [Issue:] 1 [Year:] 2022 [Pages:] 583-603
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Firms with superior productivity, labeled superstar firms, are argued to be the link between rising concentration and the fall of the aggregate labor share in the US. This analysis confirms that similar evidence is found within the European context: the market share and firm size increase, whereas the labor share decreases with productivity. One of the much discussed mechanisms behind this development is the spreading of fixed overhead labor costs: Highly productive firms gain market share, and can simultaneously spread fixed overhead labor costs over more output, thereby reducing their own labor share and the aggregated labor share of the industry. We show that this mechanism can be tested empirically. However, using German firm-level data, we do not find any empirical evidence of it. Our analysis contributes to the ongoing debate by removing one of the proposed mechanisms from the list of potential explanations for the rise of superstar firms.
Subjects: 
total factor productivity
firm size
labor share
Superstar firms
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.