Large corporations are now buying smaller rivals specifically to kill their products and prevent competition.
April 25, 2026
Original Paper
Disappearing Schumpeterian Growth: From Superstar Scaling to Arrested Dynamism
SSRN · 6638840
The Takeaway
Economic growth is supposed to be driven by creative destruction where better ideas replace old ones. Modern acquisitions have shifted toward defensive shelving, where superstar firms buy targets to prevent them from scaling. This strategy protects the market power of the incumbent but halts the overall progress of the industry. The biggest companies are no longer growing by being more efficient or innovative. They are maintaining their dominance by actively destroying the next generation of technology before it can reach consumers.
From the abstract
This paper investigates the rising concentration among the largest U.S. firms and its shifting implications for productivity from 1985 to 2023. I document a fundamental regime shift in the drivers of concentration --- from a period of "superstar scaling" to a modern era of "arrested dynamism" --- marking the disappearance of Schumpeterian growth at the upper tail of the firm size distribution. Using a micro-audited Melitz-Polanec decomposition, I show that aggregate productivity drivers structur