Market power and entrepreneurship change: the case for Australia

Date published:
1 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