Hat die oekonomische Macht von Unternehmen in Oesterreich zugenommen?

• Published in: IDEAS Working Paper Series from RePEc
• Main Authors: Reiner, Christian, Bellak, Christian
• Format: Paper
• Language: English
• Published: St. Louis Federal Reserve Bank of St. Louis 01.01.2022
• Subjects: Political power; Austria

This contribution asks whether the economic power of firms has increased in Austria in parallel with many other OECD countries. A new conceptualization of corporate power is proposed, It draws a distinction between economic and political power, as well as between economic power due to firm size (termed “scalepower†) and market power in the traditional, more narrow sense. Synthesizing the historical literature on market power in Austria provides evidence of an in some cases unjustified assumption of increased competition intensity, stimulated by events such as the fall of the iron curtain or EU accession. Based on various methods, indicators and data, we provide estimations of markups and of various competition indicators like profitability, concentration rates and firm dynamics to highlight recent changes in the market power of Austrian firms in international comparison. The evidence suggests not only rather large markups of Austrian firms, but also that markups have increased. Together with the results such as rising profit rates, we tentatively conclude that the power of Austrian firms has increased. Drawing on long lasting and still ongoing debates in Europe and the US shows some parallels and documents the necessity of a policy debate on corporate power in Austria.