explain them. We then describe a theoretical framework of endogenous markups, innovation, and competition that can potentially … firms respond to a given concentration in the economy. The results highlight that a decline in knowledge diffusion between …

. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation … knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new … evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in …