Diverging Trends in National and Local Concentration

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

doi:10.21144/wp18-15

Cited by 36 publications

(47 citation statements)

References 34 publications

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“…The time series of the employment-weighted average concentrations, however, goes in the opposite direction of that needed to explain the falling labor share. This finding is in line with findings in Rossi-Hansberg et al (2018) and Rinz (2018).…”

supporting

confidence: 93%

Labor Market Concentration Does Not Explain the Falling Labor Share

Lipsius

2018

SSRN Journal

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Using U.S. administrative data, this paper shows that the employment-weighted average labor market concentration has been declining since 1980-the opposite of the change needed to explain the falling labor share. The relationship between wages and labor market concentration has also weakened (become less negative) over that time. Together, these results make labor market concentration an implausible driver of the falling labor share despite a strong, negative relationship between labor market concentration and wages.

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supporting

confidence: 93%

Labor Market Concentration Does Not Explain the Falling Labor Share

Lipsius

2018

SSRN Journal

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“…Similarly,Rossi-Hansberg et al (2018) show while sales concentration has unambiguously risen at the national level since the 1980s, concentration has steadily declined at the Core-Based Statistical Area, county, and ZIP code levels over the same period. While these facts can seem conflicting, the authors present evidence that large firms have become bigger through the opening of more establishments or stores in new local markets, but this process has lowered concentration in those markets.…”

mentioning

confidence: 88%

Aggregate Implications of Changing Sectoral Trends

Foerster¹,

Hornstein²,

Sarte³

et al. 2019

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We find disparate trend variation in TFP and labor growth across major U.S. production sectors over the post-WWII period. When aggregated, these sector-specific trends imply secular declines in the growth rate of aggregate labor and TFP. We embed this sectoral trend variation into a dynamic multisector framework in which materials and capital used in each sector are produced by other sectors. The presence of capital induces important network effects from production linkages that amplify the consequences of changing sectoral trends on GDP growth. Thus, in some sectors, changes in TFP and labor growth lead to changes in GDP growth that may be as large as three times these sectors' share in the economy. We find that trend GDP growth has declined by more than 2 percentage points since 1950, and that this decline has been primarily shaped by sector-specific rather than aggregate factors. Sustained contractions in growth specific to Construction, Nondurable Goods, and Professional and Business and Services make up close to sixty percent of the estimated trend decrease in GDP growth. In addition, the slow process of capital accumulation means that structural changes have endogenously persistent effects. We estimate that trend GDP growth will continue to decline for the next 10 years absent persistent increases in TFP and labor growth.

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“…Other Orbis-based studies on which we build are Altomonte et al (2018), who analyse how the institutional environment influences the development of complex group hierarchies, and Conconi et al (2018), who study knowledge diffusion of export market destinations within multinational business groups. Our approach of apportioning sales of each group among multiple countries and industries is also related to a recent study which compares the effect of top firms on concentration at the national level to concentration effects of the top firms' presence in local areas such as counties and Zip codes (Rossi-Hansberg et al, 2018).…”

Section: Existing Evidence On Concentration and Competition Trendsmentioning

confidence: 99%

Industry Concentration in Europe and North America

Bajgar¹,

Berlingieri²,

Calligaris³

et al. 2019

OECD Productivity Working Papers

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This report presents new evidence on industry concentration trends in Europe and in North America. It uses two novel data sources: representative firm-level concentration measures from the OECD MultiProd project, and business-group-level concentration measures using matched Orbis-Worldscope-Zephyr data. Based on the MultiProd data, it finds that between 2001 and 2012 the average industry across 10 European economies saw a 2-3-percentage-point increase in the share of the 10% largest companies in industry sales. Using the Orbis-Worldscope-Zephyr data, it documents a clear increase in industry concentration in Europe as well as in North America between 2000 and 2014 of the order of 4-8 percentage points for the average industry. Over the period, about 3 out of 4 (2-digit) industries in each region saw their concentration increase. The increase is observed for both manufacturing and non-financial services and is not driven by digital-intensive sectors.

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Diverging Trends in National and Local Concentration

Cited by 36 publications

References 34 publications

Labor Market Concentration Does Not Explain the Falling Labor Share

Labor Market Concentration Does Not Explain the Falling Labor Share

Aggregate Implications of Changing Sectoral Trends

Industry Concentration in Europe and North America

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