Business Groups, Concentration and Market Power in India (Commander, Estrin, Thomas & Lingineni, 2026)

Summary

"Business Groups, Concentration and Market Power in India," by Simon Commander, Saul Estrin, Naveen Joseph Thomas, and Varun Lingineni, circulated as LSE Research Online Documents on Economics 138970 (2026). The paper studies how India's economic liberalization interacted with its distinctive corporate structure — a small number of family-owned business groups that operate diversified conglomerates spanning many industries — using a highly disaggregated firm-level dataset covering 2000–2020.

Findings

Two related but distinct patterns emerge from the data:

• Concentration is falling overall, but unevenly. Industry-level market concentration declined across the two-decade period as a general trend, consistent with liberalization opening markets to more entrants — but "a bloc of high-concentration sectors remains," meaning the aggregate decline masks industries where dominance persisted or intensified.
• Markups rose sharply after 2013. The ratio of revenue to variable cost — the paper's measure of pricing power — shifted upward specifically after 2013, indicating that large firms gained pricing power even as headline concentration statistics were falling.
• Business groups diversify rather than specialize. Most Indian business groups pursued strategies of diversification across sectors rather than deepening within a single industry, which the authors read as increasing inter-group competition (groups encroaching on each other's traditional territory) even as within-group economic weight keeps growing.
• Business groups' share of GDP is rising. The paper's headline concern: family-owned business groups are "entrenching across the economy and exploiting their monopoly power," accounting for a growing share of national output — a structural pattern the authors flag as relevant to other economies with similar conglomerate structures across Asia and Latin America.

Relation to the Georgist Case

This paper documents a non-land rent story with a structural resemblance to the Georgist land case that is worth stating precisely rather than blurring. Business-group market power in India is not location scarcity — it is durable advantage compounding through diversified corporate control, cross-subsidization between group subsidiaries, and political-economy entrenchment (family ownership persisting across generations in a way that echoes, without being identical to, the intergenerational transmission of land ownership advantage the wiki discusses elsewhere). The falling-concentration-but-rising-markups finding is itself notable: it is a India-specific instance of the same puzzle documented for US markets by De Loecker, Eeckhout & Unger — naive concentration measures can miss the pricing-power story that markup measures catch.

The paper adds a useful caution to any simple "concentration = monopoly rent" reading: India's falling industry-level concentration statistics would, read alone, suggest healthy liberalization-driven competition. The rising markups and persistent high-concentration bloc show that the more informative signal is pricing power and group-level economic weight, not industry HHI alone.

Nuances and Limits

• Abstract/summary-level sourcing. This page is built from the paper's abstract and a secondary summary rather than a full read of the working paper text; specific quantitative results (e.g. the magnitude of the post-2013 markup increase, sector-level concentration figures) are not independently verified here. Graded B-claim.
• Working paper, not yet peer-reviewed as of this writing.
• No explicit land-rent framing in the original. The connection to the wiki's broader rent-seeking and market-power literature is this wiki's own synthesis (D-claim, interpretive), not an argument the authors make.

Bears On

• Problem: Rent-Seeking Drags Growth — a concrete, data-driven national case study of entrenched non-land economic rent.
• Problem: Corporate Profits Increasingly Rents — the rising-markups finding is the Indian data point in this broader pattern.
• Research: De Loecker, Eeckhout & Unger: The Rise of Market Power — the US markup-rent literature this paper's India findings parallel.

See Also

• Rent-Seeking
• Rentier (concept)
• De Loecker, Eeckhout & Unger: The Rise of Market Power
• Portal: The Rent Frontier

Sources

1. Simon Commander, Saul Estrin, Naveen Joseph Thomas & Varun Lingineni (2026), "Business Groups, Concentration and Market Power in India," LSE Research Online Documents on Economics 138970. ideas.repec.org — fetched and read (abstract/summary level) 2026-08-22; used for the falling-concentration /rising-markup finding, the post-2013 markup shift, the business-group diversification pattern, and the entrenchment/monopoly-power headline conclusion (B-claim; abstract-level scan, full working paper not independently retrieved).