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Federal Reserve Bank of Richmond
Working Paper
Diverging Trends in National and Local Concentration
Esteban Rossi-Hansberg
Pierre-Daniel G. Sarte
Nicholas Trachter

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 seven years. Our findings, therefore, reconcile the increasing national role of large firms with falling local concentration and a likely more competitive local environment.

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Esteban Rossi-Hansberg & Pierre-Daniel G. Sarte & Nicholas Trachter, Diverging Trends in National and Local Concentration, Federal Reserve Bank of Richmond, Working Paper 18-15, 24 Sep 2018.
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Keywords: national product-market concentration; local concentration
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