Working Paper: CEPR ID: DP13174
Authors: Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Nicholas Trachter
Abstract: 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.
Keywords: No keywords provided
JEL Codes: E23; L11; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| National Concentration (D30) | Local Concentration (D30) |
| Entry of Top Firms (L19) | Local Concentration (D30) |
| Opening of Walmart Stores (L81) | Local HHI (L19) |
| Top Firms Expanding (L25) | Local Competition (L13) |