The impact of superstar firms on the labor share: Evidence from Belgium
Publication typeJournal article with impact factor
JournalDe Economist - Netherlands Economic Review
MetadataShow full item record
AbstractThe Belgian labor share, measured as the part of GDP going to labor, is declining. This fits into the global secular trend of decreasing labor shares. A novel strand in the literature focusses on its granular drivers. Recent research in the United States suggests that superstar firms, defined as large firms with a dominant market share, are increasing their market share and relate this to the fall of the labor share (Autor et al. in Q J Econ 135(2):645-709, 2020). Using a long time series of Belgian firm-level data from 1985 to 2014, we provide evidence for the link between the rise of market concentration and the decrease of the labor share in its two largest sectors: Manufacturing and Wholesale & Retail. These two sectors represent approximately half of the Belgian economy. We do not find evidence in other Belgian sectors.
KeywordLabor Share, Superstar Firms, Market Concentration, Firm-level Data, Pakes Productivity Decomposition