Reuters reports that the International Monetary Fund said in a new research paper that the coronavirus pandemic has significantly strengthened the market power of dominant firms, which could drag on medium-term growth and stifle innovation and investment.

Key indicators of market power are on the rise, including price markups over marginal costs, and the concentration of revenues among the four biggest players in a sector, the IMF study said. Part of this was due to increased bankruptcies as the pandemic caused competition to fall away.

"Due to the pandemic, we estimate that this concentration could now increase in advanced economies by at least as much as it did in the 15 years to end of 2015," IMF Managing Director Kristalina Georgieva said in a blog post accompanying the paper.

"Even in those industries that benefited from the crisis, such as the digital sector, dominant players are among the biggest winners."