It’s not clear exactly what is fueling the overall growth of top Fortune companies, but there are a number of popular views.
With a slew of mergers and acquisitions — like the Verizon-AOL deal — big businesses might be snapping up or joining with rivals, and that corporate consolidation may have led to a concentration of market power. That’s the skeptical-of-business view.
Alternatively, big U.S. companies might just be riding a streak of legitimate success. Apple had the most profitable corporate quarter in history because people really like the company’s products. The U.S. boasts many of the world’s best-performing companies, so it’s not a stretch to think big business would outpace the economy as a whole. That’s the pro-business view.
And there is a third explanation, which does not point to growing monopoly power nor to pure excellence: globalization. Global trade has exploded in the last two decades. And these giant U.S. businesses might just be leveraging their already large scale to grow further in overseas markets.
As big business gets bigger, the biggest businesses are growing even faster. The Fortune 100, or the 100 companies with the highest revenue, have seen their proportion of nominal GDP rise from about 33 percent in 1994 to 46 percent in 2013. As a share of all Fortune 500 revenues, revenues for these top 100 companies were up to 63 percent in 2013 from 57 percent in 1994.....
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I think the mergers and acquisitions piece has a lot to do with it. Overall, it is providing a lot of monopoly power and is eliminating competition in markets. For example, we pay more for wireless internet services than some other countries and get much less quality service. this is simply because a lack of competition and monopoly power in this industry in America. Sure, businesses might be riding a streak of legitimate success, but could it bite people in the long run?
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