As startups become increasingly rare and industries grow more concentrated, the U.S. central bank is pointing a finger -- at itself.
Low interest rates may be driving big companies to buy up ideas, researchers at the Federal Reserve Bank of Philadelphia argue in a new paper. Bigger firms are more leveraged, the authors find, which is probably because they operate in more business lines and enjoy relatively stable levels of employment and sales. Diversification boosts creditworthiness, leaving large firms better placed to borrow against future cash flow when they get hold of new ideas.