Mark-ups in the cement industry: An evolution of scale economies and market power

Grant description:

Prior research suggests that concentration and firm mark-ups have increased in the United States over the past several decades, potentially resulting in a higher share of income going to capital instead of labor. These previous multi-industry studies have not addressed why concentration and mark-ups may have increased, and how policies, such as greater antitrust enforcement or merger review, could alter these trends.

This project aims to contribute to these unanswered questions by focusing on an industry-specific analysis. Utilizing cement industry data from the United States between 1973 and 2019, the authors will explore how technological change sparked by the introduction of the precalciner kiln altered market structure and the changes in the share of income going to owners’ profits relative to workers’ wages over time.