New Research on Industry Consolidation Featured in Prestigious Finance Journal
Yelena Larkin, Assistant Professor of Finance at Schulich, is the co-author of a new research paper that is garnering international media coverage and has become the lead article in the latest issue (July 2019) of the top-tier journal, Review of Finance.
Titled “Are US Industries Becoming More Concentrated?”, the paper is co-authored by professors Yelena Larkin, Gustavo Grullon, and Roni Michaely. The paper’s research findings have generated international media coverage, including articles in The Wall Street Journal, New York Times and Economist.
She has conducted similar research related to Canadian industry together with Schulich PhD student Ray Bawania. Their preliminary findings show that Canadian industry is becoming increasingly concentrated.
According to Professor Larkin, “The Canadian economy has been affected by two crucial factors that have led to product market consolidation: the first is weak anti-trust legislation and practices; and the second is increasing barriers to entry, potentially related to changing technology.”
Adds Professor Larkin: “We find that large firms have grown bigger and become more dominant, and there has also been, at the same, a steep decline in the number of public firms, the largest players in the economy, also pointing to a consolidation.”
The end result, she notes, is that consolidation has led to increased profit margins and market share for bigger companies with less competition.