Corporate market power has risen in recent decades and the likely wave of SME bankruptcies from the ongoing pandemic will further strengthen market concentration. We provide new evidence on heterogeneity in rising market power in advanced economies across geographical areas, industries and types of firms, and declining churn among high-markup firms. We find a direct empirical link between rising market power and declining business dynamism, including the role of M&A deals. We also establish a connection between dominant firms’ power in product markets and their power in labour markets. This motivates reforms of competition policy frameworks, both in general and in response to the rise of the digital economy.

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