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Creative destruction in local markets

Author

Listed:
  • Jaap H. Abbring
  • Jeffrey R. Campbell

Abstract

This article uses a panel of Texas restaurants' and bars' alcohol to measure the pace of creative destruction--the ongoing replacement of unproductive competitors with the new firms--and it investigates whether producers in more concentrated markets might use their market power to stabilize the industry structure. The authors find the opposite to be true: Local markets with more concentrated alcohol sales display more creative destruction.

Suggested Citation

  • Jaap H. Abbring & Jeffrey R. Campbell, 2004. "Creative destruction in local markets," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 28(Q II), pages 50-60.
    • Handle: RePEc:fip:fedhep:y:2004:i:qii:p:50-60:n:v.28no.2
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    File URL: https://web.archive.org/web/20220909041807/https://www.chicagofed.org/-/media/publications/economic-perspectives/2004/ep-2-qtr-2004-part-4-pdf.pdf
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    References listed on IDEAS

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    1. Daniel S. Hamermesh & Wolter H. J. Hassink & Jan C. Van Ours, 1996. "Job Turnover and Labor Turnover: A taxinomy of Employment Dynamics," Annals of Economics and Statistics, GENES, issue 41-42, pages 21-40.
    2. Peltzman, Sam, 1977. "The Gains and Losses from Industrial Concentration," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 229-263, October.
    3. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    4. Jeffrey R. Campbell & Hugo A. Hopenhayn, 2005. "Market Size Matters," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 1-25, March.
    5. Jeffrey Campbell, 1998. "Entry, Exit, Embodied Technology, and Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 371-408, April.
    6. Smith, Ransford, 2004. "Size matters," World Trade Review, Cambridge University Press, vol. 3(3), pages 441-446, November.
    7. repec:adr:anecst:y:1996:i:41-42:p:02 is not listed on IDEAS
    8. Jaap H. Abbring & Jeffrey R. Campbell, 2003. "A Structural Empirical Model of Firm Growth, Learning, and Survival," NBER Working Papers 9712, National Bureau of Economic Research, Inc.
    9. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
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    Cited by:

    1. Jeffrey R. Campbell, 2011. "Competition in large markets," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(7), pages 1113-1136, November.

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