Is contemporary OECD capitalism rentier capitalism?

Capitalism in the OECD is often accused of being a rentier capitalism, i.e. profits result not from companies’ innovation or efficiency gains, but from rent-seeking: companies acquire dominant positions in goods and services markets, enabling them to increase their profit margins; and dominant positions in the labour market, enabling them to suppress wages. To determine whether or not profits stem solely from rents, we examine , across OECD countries, whether or not corporate profitability has a link with companies’ innovation and modernisation effort or with productivity growth. If the answer is no, then higher profits probably result solely from rent-seeking. We find that profitability is positively correlated with companies’ innovation and modernisation effort . This ought to disqualify the rents hypothesis.