The performance of oligopolies globally: A study of trends across industries

Abstract

The broad aim of this report is to evaluate, over time, the effect and inter-relation of various aggregate industry metrics related to profitability and competitiveness. Research reports studying industry dynamics in the USA have come up with different observations highlighting and proposing interesting trends. These include correlating an investment slowdown in US industries with declining competition since around 20001 , the influence of factors like competitiveness on earnings management in US companies2 , etc. More mathematically rigorous models, and focusing on markets beyond the USA, also investigate this relation, with focus on different sectors and varying data fields3 . Our study focused exclusively on public companies in the USA. The period between 1960s to the present have witnessed many important events in global and US domestic economy, with periodic recessions and global tensions, as well as liberalization in emerging economies leading the way for impactful trends across industries. The richness and extensiveness of the data, capturing key financial and market data, enabled us to study the inter-relations without having to worry about authenticity and sample size. The choice of taking public companies solely in our study helped us ensure uniformity and validity of variables used in the analysis, but at the cost of missing out on key companies across industries.