Are Industries Becoming More Concentrated? The Canadian Perspective

Abstract

Since the late 1990s, U.S. industries have experienced an increase in concentration levels. In this paper, we try to understand the drivers of this trend by asking whether this phenomenon has been echoed in Canada – a large and developed economy with geographic proximity and economic ties to the U.S. We find that Canadian firms have also exhibited signs of consolidation. First, large firms have become more dominant, and the number of TSX publicly traded firms has dropped. Second, firms in industries with the largest increases in product market concentration started to generate higher profit margins. Third, the volume of MA and two, increasing barriers to entry.