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Working Papers

September 2018, No. 18-15

Diverging Trends in National and Local Concentration

Esteban Rossi-Hansberg, Pierre-Daniel G. Sarte and Nicholas Trachter

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.

DOI: https://doi.org/10.21144/wp18-15

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