White House Says More Competition Needed Within Supply Chain
There may be a need for more competition within the supply chain in order to address "market structure changes," said the White House in a brief about the benefits of competition released on April 15 (here). The transportation and warehousing…
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industry was among a list of highly concentrated industries, with an 11.4% increase in revenue earned by the 50 largest firms over the period 1997-2012. "A natural question is whether increased concentration in one area of the supply chain leads to increased concentration in other parts of the supply chain," said the Council of Economic Advisors, which produced the brief. "One might imagine that consolidation could improve a firm’s bargaining position with upstream suppliers and downstream customers. More generally, economists are beginning to model and better understand empirically how consolidation in one part of the supply chain affects market outcomes and consumer welfare in other parts of the supply chain." Research on this "will continue to be of use to antitrust authorities and regulators, ultimately helping to benefit consumers," it said.