The Anatomy of Concentration: New Evidence From a Unified Framework / Kenneth R. Ahern, Lei Kong, Xinyan Yan.

Author
Ahern, Kenneth R. [Browse]
Format
Book
Language
English
Published/​Created
Cambridge, Mass. National Bureau of Economic Research 2024.
Description
1 online resource: illustrations (black and white);

Details

Series
  • Working Paper Series (National Bureau of Economic Research) no. w32057. [More in this series]
  • NBER working paper series no. w32057
Summary note
Concentration is a single summary statistic driven by two opposing forces: the number of firms in a market and the evenness of their market shares. This paper introduces a generalized measure of concentration that allows researchers to vary the relative importance of each force. Using the generalized measure, we show that the widely-cited evidence of increasing industrial employment concentration is driven by the Herfindahl Index's over-weighting of evenness and under-weighting of firm counts. We propose an alternative, equally-weighted measure that has an equivalent economic meaning as the Herfindahl Index, but possesses superior statistical attributes in typical firm size distributions. Using this balanced measure, we find that employment concentration decreased from 1990 to 2020. Finally, decomposing aggregate diversity into meaningful geographic and industry subdivisions reveals that concentration within regional markets has fallen, while concentration between markets has risen.
Notes
January 2024.
Source of description
Print version record
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