TY  - JOUR
AU  - Campbell,Jeffrey R.
AU  - Hopenhayn,Hugo A.
TI  - Market Size Matters
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9113
PY  - 2002
Y2  - August 2002
UR  - http://www.nber.org/papers/w9113
L1  - http://www.nber.org/papers/w9113.pdf
N1  - Author contact info:
Jeffrey R. Campbell
Senior Economist
Economic Research Department
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL 60604-1413
Tel: 312/322-6156
Fax: 312/322-2357
E-Mail: jcampbell@frbchi.org

Hugo Hopenhayn
UCLA
Department of Economics
Los Angeles, CA  90095
Tel: 310/206-8896
E-Mail: hopen@econ.ucla.edu
AB  - 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.
ER  -