Abstract

The paper first classifies the industries according to the two-digit codes of the Korean Standard Industrial Classification (KSIC) and calculates Concentration Ratios, Gini Coefficients, and Herfindahl?Hirschman Indices based on sales and innovative activities (R&D investment and the number of patents and IRPs). Then, it computes a weighted average of the three metrics to analyze the concentration in the ICT industry and the whole economy. Next, the study deploys the semi-parametric estimation method from Ackerberg et al. (2015), among others, to estimate the production function for each industry and computes company-level total factor productivity (TFP). Then, it decomposes the TFP of the economy calculated as a weighted average of the estimated TFP metrics of each company according to the methodology from Melitz and Polanec (2015) to identify the contributions from the top-ranking firms and the ICT industry and analyze the impact of market concentration on TFP. Lastly, a panel regression analysis is conducted using industry-level TFPs as dependent variables and concentration indicators, innovative activities, and dynamics of companies as independent variables to analyze the impact of market concentration on productivity from the econometrics perspective.