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… is from pages 89-90 of Tyler Cowen’s excellent 2019 book Big Business: A Love Letter to an American Anti-Hero [2]:
There is some evidence, by the way, that observed increases in [industry] concentration ratios are correlated with government regulation of business. As government regulates business more, that favors corporations large enough to have substantial legal and compliance departments. Regulation serves as a kind of fixed cost of doing business, discouraging market entry. Not only do higher rates of regulatory growth correlate with increases in market concentration ratios, but the period during which regulation increased significantly, 1990-2000, was followed by increases in market concentration.
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