In 2015, worldwide mergers and acquisitions added up to a record $4.28 trillion worth of deals. These mega-mergers, such as the Dow and DuPont $130 billion deal and the recent $66 billion deal between Bayer and Monsanto, are prominent examples of companies consolidating within their industries. Economists today are asking themselves whether these mergers and concentrated sectors are to be revered or feared.

Big businesses strive to become even bigger and more dominant within their sectors. Multiple industries have seen a large increase in mergers and acquisitions since 1990. In 1990, there were 11,500 deals. In 2008, that number has risen to 30,000. Although the image of a booming Silicon Valley makes start-ups feel ubiquitous in America, the rate of new businesses formation has actually been declining for the past three decades. Since 1986, the United States workforce has seen a 53 percent increase in employment by the 100 biggest businesses according to The Economist. Americans and people around the world are feeling the increased effects of large corporations.

There are many reasons why companies merge together. For one, companies that merge can produce more goods at a cheaper price and thus achieve economies of scale. Steel industry mergers in the early 20th century were often motivated by this reason.

Another reason is innovation. After a merger, the resulting company’s increased profits could be used to design new goods and services that smaller companies may not have enough capital to achieve.

A company may also buy out another company to eliminate its competition, diversify its products for different industries or to increase its supply. Overall, companies want to get bigger, increase their power in the market and achieve record profits year after year.

However, what are the reasons behind the increase in mergers? One main factor has been low-interest rates for the past ten years. The low rates make it easier to borrow money and buy out other companies. Also, after the 2008 financial crisis, businesses have been wary of reinvesting excess returns. As a result, there have been huge cash reservoirs left unused by companies. These reservoirs are then used to buy out companies through mergers and acquisitions. Since the demand for goods and services in the global economy has been depressed, businesses are motivated to grow their profits through mergers rather than organic growth.

The United States has seen this massive shift towards large companies ruling industries. The proportion of United States GDP generated by the largest 100 companies rose from 33 percent in 1994 to 46 percent in 2013. The Economist referred to this trend as a “concentrated version of capitalism.”

Many problems arise when few companies control the majority of an industry. Aside from the other reasons why companies merge and expand their cash flows, such as economies of scale and globalizing their products, merging companies also seek more conniving perks. Consolidation may lead to more lobbying power which could then lead to the creation of financial regulations that suit the company.

Companies also merge in order to take advantage of tax cuts. This was evident in the attempted $160 billion merger between Pfizer and Allergan. The CEO of Pfizer proclaimed the deal was to combine both pharmaceuticals companies for more researching power. Months later, the Obama administration passed new corporate tax inversions laws. The deal was soon abandoned, which made it clear that the real motivation to merge was to move Pfizer’s headquarters to Ireland for the 12.5 percent tax rate, compared to their previous 35 percent US tax rate.

One aspect that economists are wary of is the effect ever-expanding businesses have on competition. Competition within the economy is one of the most vital forces that keeps innovation, productivity and growth in tune. Uncompetitive markets can result in sluggish productivity trends and higher prices for consumers.

The United States is undergoing a shift from competitive markets to consolidated ones. The 1980s deregulation enacted by the Reagan administration was intended to bring competition to untapped industries, like telecommunications. This created increased competition that is now disappearing as big businesses begin to focus more on consolidating and morphing into larger corporations.

As companies grow, extend their lobbying power and increase their profits, they shift their focus to creating a more defensive outlook towards competitors. Small companies that rival large businesses have an extremely hard time competing. In theory, if a company is enjoying high profits, rival companies compete by creating cheaper or better products so that the profits settle back to normal levels. America has not seen many such examples of competitive advantage in this decade. Firms in 2003 that had 15 percent or more in profits still had an 83 percent chance of being profitable ten years later in 2013.

Although merging and growing companies are feared by some, large corporations should also be celebrated. Big companies have the resources to mass produce electric cars at affordable prices. Google may be one of the largest corporations in the world with enormous power within its industry, but the company is responsible for its unbelievable search engines that almost everyone with the internet uses every day. Without the massive size of some businesses, people may have never used or imagined the goods and services available in the economy.

The trend towards large, consolidated companies has been increasing in the United States. Businesses taking advantage of deregulation and easier credit create highly concentrated industries that pose both benefits and disadvantages for consumers. Whether the benefits outweigh the disadvantages remains to be seen.