Staff Research Paper 2/2020
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.
- 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