Diverging Trends in National and Local Concentration

By Esteban Rossi-Hansberg, P. Sarte, Nicholas Trachter. NBER macroeconomics annual, 2018

174 citations recorded by the source corpus.

The views expressed herein are those of the authors and do not necessarily represent the views of the Federal Reserve Bank of Richmond or the Federal Reserve System. We thank Eric LaRose and Sara Ho for outstanding research assistance.Using U.S. NETS data, we present evidence that the positive trend observed in national product-market concentration between 1990 and 2014 becomes a negative trend when we focus on measures of local concentration. We document diverging trends for several geographic definitions of local markets. SIC 8 industries with diverging trends are pervasive across sectors. In these industries, top firms have contributed to the amplification of both trends. When a top firm opens a plant, local concentration declines and remains lower for at least 7 years. Our findings, therefore, reconcile the increasing national role of large firms with falling local concentration, and a likely more competitive local environment.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/16019a0a6c1d49ec9d78bbc839d9b5f89eb55af5

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

What Happened to US Business Dynamism? (2019, unknown): “A. 6 While most of these papers analyze industries at the national level, Rossi-Hansberg, Sarte, and Trachter (2018) find that, for several industries, the increase in market concentration at the national level coincides with a decline in concentration at the local level, raising the question of…”
Industry Concentration in Europe and North America (2019, background): “Our approach of apportioning sales of each group among multiple countries and industries is also related to a recent study which compares the effect of top firms on concentration at the national level to concentration effects of the top firms’ presence in local areas such as counties and Zip codes (”
From Good to Bad Concentration? US Industries over the Past 30 Years (2019, background): “15See Rossi-Hansberg et al. (2018), among others, for related evidence; but note that their conclusions are controversial (Ganapati, 2018).”