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Diverging Trends in National and Local Concentration

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  • Rossi-Hansberg, Esteban
  • Sarte, Pierre-Daniel
  • Trachter, Nicholas

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.

Suggested Citation

  • Rossi-Hansberg, Esteban & Sarte, Pierre-Daniel & Trachter, Nicholas, 2018. "Diverging Trends in National and Local Concentration," CEPR Discussion Papers 13174, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13174
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    More about this item

    JEL classification:

    • 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)

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