Superstar case study

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Superstar case study in 2021

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What does it mean to be a superstar?

We focus on economic profit for firms and extend our analysis to cities and sectors of economic activity. Although a variety of definitions exist, we define superstar to mean a firm, sector, or city that has a substantially greater share of income than peers and is pulling away from those peers over time.

Why are superstars more successful than their peers?

In addition to capturing a greater share of income and pulling away from peers, superstars exhibit relatively higher levels of digitization; greater labor skill and innovation intensity; more connections to global flows of trade, finance, and services; and more intangible assets than do their peers.

How are superstar firms different from bottom decile firms?

Today’s superstar firms have 1.6 times more economic profit on average than superstar firms 20 years ago. Today’s bottom-decile firms have 1.5 times more economic loss on average than their counterparts 20 years ago, with one-fifth of them (a growing share) unable to generate enough pretax earnings to sustain interest payments on their debt.

Are there superstar firms in the top 10 percent?

Superstar firms continue to be displaced from the top 10 percent and the top 1 percent. Indeed, some firms have risen from the bottom 10 percent to higher deciles—a few all the way to the top 10 percent.

Last Update: Oct 2021


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