From Good to Bad Concentration? US Industries over the Past 30 Years

We study the evolution of profits, investment, and market shares in US industries over the past 40 years. During the 1990s, and at low levels of initial concentration, we find evidence of efficient concentration driven by tougher price competition, intangible investment, and increasing productivity of leaders. After 2000, however, the evidence suggests inefficient concentration, decreasing competition, and increasing barriers to entry as leaders become more entrenched and concentration is associated with lower investment, higher prices, and lower productivity growth.