Market Size Matters
Jeffrey R. Campbell
Federal Reserve Bank of Chicago
Hugo A. Hopenhayn
University of California, Los Angeles (UCLA) - Department of Economics
FRB of Chicago Working Paper No. 2003-12
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 most industries we examine, establishments are larger in larger cities. Models of large-group competition in which markups fall after adding competitors can reproduce this observation.
Number of Pages in PDF File: 45
JEL Classification: L11, L16, L81working papers series
Date posted: September 24, 2003
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