Market Size Matters

Jeffrey Campbell and Hugo Hopenhayn

No 9113, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper characterizes the effects of market size on the size distribution of establishments for thirteen retail trade industries across 225 U.S. cities. In nearly every industry we examine, establishments are larger in larger cities, and in four industries the dispersion of establishment sizes depends on market size. Models of competition in which individual producers' markups do not depend on the number of producers are inconsistent with these observations. Models in which competition is tougher in larger markets can reproduce the positive effect of market size on establishments' average size.

JEL-codes: L11 L16 (search for similar items in EconPapers)
Date: 2002-08
New Economics Papers: this item is included in nep-ent and nep-mic
Note: IO
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Citations: View citations in EconPapers (21)

Published as Campbell, Jeffrey R. and Hugo A. Hopenhayn. "Market Size Matters," Journal of Industrial Economics, 2005, v53(1,Mar), 1-25.

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Related works:
Journal Article: MARKET SIZE MATTERS (2005)
Working Paper: Market size matters (2003)
Working Paper: Market Size Matters (2000)
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