Language:
English
Pages:
1 Online-Ressource (circa 70 Seiten)
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Series Statement:
Policy research working paper 8534
Series Statement:
World Bank E-Library Archive
Series Statement:
Policy research working paper
Parallel Title:
Erscheint auch als Ayyagari, Meghana Who are America's Star Firms?
Keywords:
Graue Literatur
Abstract:
There is wide spread concern about a growing gap between top-performing publicly listed firms and the rest of the economy and the implications of this for rising inequality in the U.S. Using conventional return calculations, there is indeed a widening gap between star firms (defined as those with top 10 percent of return on invested capital in any year) and the rest of the economy over time, especially in industries that rely on a skilled labor force. However, once measurement error in intangible capital is accounted for, this gap shrinks dramatically and has not been widening over time. While pricing power, as measured by markups, predicts star firm status, a large fraction of star firms have low markups and there is no evidence that star firms are cutting output or investment more than other firms for the same markup. The effect of star status is persistent. Five years later, star firms have higher growth, profits, and Tobin's Q. A subset of exceptional firms may pose more pressing policy concerns with much higher returns and the potential to exercise market power in the future
DOI:
10.1596/1813-9450-8534
URL:
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