Increasing returns to scale

Given needs for R&D, IT innovation, automation, spending related to ethics and risk prevention, etc., companies’ fixed costs have increased considerably. The upshot is that there are increasing returns to scale. What happens when there are increasing returns to scale? There is corporate concentration and large global companies emerge; This gives rise to problems for competition policy and to new regulations; Concentration results in higher profit margins; Benefiting from increasing returns to scale requires the existence of large integrated goods and services markets, will encourage the continued advance of free trade, will worsen the situation of countries that remain outside a large free trade area and will punish protectionism .