More concentration, less dynamism may dampen US growth

Subject Impact of greater market concentration. Significance US business concentration has risen since the 1990s, accompanied by higher profit margins, weaker investment and labour accounting for a lower share of income. Research finds that having fewer new firms entering industry is reducing business dynamism and workers’ geographic and sectoral mobility, as well as making it easier for less productive firms to stay in business. In Europe, competition policy is more vigorous and business concentration is lower -- but neither business dynamism nor productivity is notably higher than in the United States. Impacts The benefits that the largest tech firms have produced, such as job creation and tech innovations, have muted criticism of their practices. The giant tech firms that have branched out into other sectors will be targets for breakup and other anti-monopoly actions. The EU is pressing for digital firms’ sales to be taxed in the country of sale; this could help EU firms compete with larger US ones.

The importance of being European: Airbus and West German industrial policy from the 1960s to the 1980s

Focusing on the time span from the 1960s to the late 1980s, that is, on the period during which Airbus established itself as a serious competitor on the world market, this article analyses the German aircraft industry’s interests, its representation within the transnational Airbus project, and the relevance of what might be called ‘Europeanness’. Occasionally also touching upon the situation in its partner countries, the central question is whether the respective political strategies of collaboration in the German aircraft industry were motivated by self-serving national interests or broader European ones. The article is divided into three sections. It begins by scrutinizing the motivations of German politics in the establishment and promotion of the Airbus project. Second, it deals with the representation of national interests in the allocation of production shares and the organization of cooperation, and, finally, with the European aspects of the massive subsidization of national manufacturers. It comes to the conclusion that the German case in particular illustrates that European collaboration in the aircraft sector was appreciated as an instrument to facilitate the survival of national industries pursuing their own business interests. The establishment of Airbus was supported as a European project to ensure the survival of the German aircraft industry and sometimes even as an instrument of business concentration. Nevertheless, notions about European integration or Franco-German friendship certainly increased the willingness to spend a lot of money on the Airbus project as the flagship of entanglement and interconnectedness in a ‘future industry’.

Motives Driving the Choice of a Business Concentration: A Four-Country Study of Marketing, Accounting and Finance, and Management Undergraduates

This four-country study compares business students concentrating in marketing, accounting and finance (AF), and management with respect to five motives: lifestyle aspirations, reputational effects, relative ease of completion, career outcomes, and developmental skills. We find that, except for the developmental skills motive, the importance of different motives varies with concentration choice. Lifestyle aspirations and relative ease of completion motives tend to be generally more important to marketing than AF and management concentrators, while career outcomes are more important to AF concentrators compared with marketing and management concentrators. Comparing marketing students in the United States to their counterparts elsewhere, those in China are significantly less attracted to lifestyle aspirations, reputation, and career outcomes, while those in the United Arab Emirates show no significant differences in career outcomes or reputation compared with those from the United States. The implications of these findings are discussed in the context of variations in cognitive styles of concentrations, cultural norms, and market forces between tight and loose societies, with implications for managers of educational institutions.

Intangibles, Investment, and Efficiency

Recent work on macroeconomic trends has emphasized slowing capital investment, but strong business profits and valuations. The retail sector is a microcosm of these trends, and accounts for a large share of the increase in aggregate business concentration also observed in recent years. We show that, in that sector, weak investment and rising concentration are associated with rising productivity. Additionally, stronger productivity is correlated with intangible investment, both over time and across subindustries. Intangible investment may thus provide a joint explanation for rising productivity, weak capital investment, and increasing industry concentration.

Actor Network Theory in Tourism

The purpose of this study is to use actor network theory to explore the short-term and long-term relationships between two Asian countries: Malaysia and China, the two most visited countries in Asia in 2012. The Actor Network theory explains the roles of two actors China and Malaysia in tourism as mobility and performativity, respectively. The tourism in China is composed of culture differences whereas the tourism in Malaysia focuses on business concentration. Vector Auto Regressive, Vector Error Correction, and Granger analysis were conducted to explore the time series data of tourism receipts. Findings indicate that both Malaysia and China do not have short-term influence of tourism development. Interestingly, the long-term tourism of Malaysia will depend on the disequilibrium of tourism receipts between China and Malaysia but not vice versa. The findings have contributed to supporting the Actor Network Theory in developing tourism of China and Malaysia.

Entrepreneurship, Innovation, and Antitrust

Entrepreneurship is key to productivity growth, yet in recent decades new-firm formation has flagged. There is some evidence that business concentration may be a contributing cause. Well-designed antitrust enforcement policy, especially aimed at policing abuse of market power by dominant platforms, will be crucial to preserving opportunities for new entrants, especially in technology sectors. But antitrust procedures should also be updated to speed up decisions so that legal outcomes are not completely outpaced by technology.