Federal Reserve Bank of Richmond
Diverging Trends in National and Local Concentration
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.
Cite this item
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.
- E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
Keywords: national product-market concentration; local concentration
This item with handle RePEc:fip:fedrwp:18-15
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