© Reuters. FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington
WASHINGTON (Reuters) – The coronavirus pandemic has significantly strengthened market power among dominant firms, which could put a drag on medium-term growth and stifle innovation and investment, the International Monetary Fund said on Monday in a new research paper. The research shows that key indicators of market power are on the rise, including price markups over marginal costs, and the concentration of revenues among the four biggest players in a sector, the IMF said.
“Due to the pandemic, we estimate that this concentration could now increase in advanced economies by at least as much as it did in the 15 years to end of 2015,” IMF Managing Director Kristalina Georgieva said in a blog post accompanying the paper. “Even in those industries that benefited from the crisis, such as the digital sector, dominant players are among the biggest winners.”
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