IDEAS home Printed from
   My bibliography  Save this paper

Concentration and Foreign Sourcing in the U.S. Retail Sector


  • Dominic Smith

    (University of Minnesota)


The U.S. retail sector has changed over the past three decades from one with many small firms to one dominated by large firms. Simultaneously, foreign sourcing of consumer goods has increased substantially, with much of that increase driven by large retailers' imports from China. This study examines the role of direct imports from China in the transformation of the U.S. retail sector. I propose two changes to measuring concentration. Existing work on concentration tends to study its evolution using national, industry-level data, but these metrics provide an incomplete picture given the local nature of competition in retail and the growing importance of multi-product general merchandisers who compete across industries. I therefore construct new data on store-level revenue for all U.S. retailers by 20 major categories of goods. While the national product-level Herfindahl-Hirschman Index more than doubled between 1997 and 2007, local concentration increased by only 50 percent. The new local-by-product concentration measures also enable me to perform an analysis of the role of globalization in increased concentration. I construct a measure of each small store's exposure to direct imports of large retailers. Using a store-level Bartik instrument (1991), the results suggest that a one percentage point increase in exposure to direct imports leads to a 0.7-1.7 percentage point increase in the probability a small store exits. I use a dynamic, continuous-time entry model to estimate the net effect of imports on the structure of competition in clothing sales, a product category highly exposed to direct imports. The results indicate that direct imports account for at least 14 percent of the decrease in the number of small clothing stores.

Suggested Citation

  • Dominic Smith, 2019. "Concentration and Foreign Sourcing in the U.S. Retail Sector," 2019 Meeting Papers 1258, Society for Economic Dynamics.
  • Handle: RePEc:red:sed019:1258

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed019:1258. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.