<p>This paper examines the interactions between productivity, market structure, and income distribution. It analyzes how productivity gains—arising in either mature or expanding industries, and originating either in the consumption or in the capital-goods sector—are distributed across economic agents under different institutional configurations and market structures. Our findings show that when markets are saturated, the benefits of productivity gains will not accrue to the owners of innovating firms unless higher markups or some degree of market concentration emerge. Conversely, in expanding sectors where demand remains elastic, productivity growth can simultaneously sustain both profit and wage earners, allowing income gains to be shared more evenly across agents. Yet even in these cases, outcomes ultimately depend on the prevailing market configuration and the presence of entry barriers.</p>