Market power and entrepreneurship change: the case for Australia

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Staff Research Paper 2/2020
Publication Date: 
July 2020

The rate of entrepreneurship in Australia has been declining since 2005.

This study tests whether a change in the market power could be behind this decline. It introduces a new index of market power to compare industries. It uses a variety of methods to evaluate the impact of the constructed index.

Key findings:

  • Increasing market power, as expected, is detrimental to firm entry.
  • Market power does not increase in all industries.
  • Changes in market power do not explain the decline in entrepreneurship.
  • Most of the drop in entrepreneurship is attributable to other causes.

Author: Sasan Bakhtiari

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