The evolution of firms' market power in Norway
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- Master's theses (HH) 
This thesis documents the evolution of market power in Norway from 1980 to 2017. Firm-level markups are estimated through a production approach, relying on income statements and balance sheets of all publicly listed Norwegian firms. Several interesting results emerge from this exercise. First, the aggregate markup has increased by about 24 percent since 1980. Second, the cross-sectional distribution of firm-level markups has become more dispersed, and the aggregate trend is mainly driven by firms in the upper tail of the distribution. Third, markups at the firm level are negatively correlated with firm size. Fourth, at the industry level, markups have grown substantially in industries such as financials, telecommunications and petroleum, while they have declined in consumer goods. Fifth, a detailed decomposition of firm-level markups reveals that the secular rise in Norway is due to growing markups within firms, rather than reallocation of market shares across firms. Finally, I also do a first attempt at shedding some light on the possible drivers of rising markups. In particular, I investigate whether declining global interest rates can explain some of the results described above. Using panel data techniques, I find that the secular decline in global interest rates might have benefited high productivity firms more than others, possibly allowing them to acquire market power at the expense of less productive competitors. These results have potentially important implications for monetary and fiscal policy.