I am a graduate student in the Department of Economics at the University of Minnesota. My research focuses on the causes and consequences of the growth of large retailers such as Walmart, Target, and Amazon.

I will be on the 2018-2019 job market and available for interviews at the 2019 ASSA Meetings in Atlanta, GA.

Dominic Smith

Contact Information

Dominic Smith
3-103 Hanson Hall
smit6226@umn.edu

Mailing Address
Department of Economics
University of Minnesota
1925 4th St S, Room 4-101
Minneapolis, MN 55455

Current CV

Job Market Paper

Foreign Sourcing and Local Concentration in the Retail Sector
Retail has changed from a sector with many small firms to one dominated by large firms. Simultaneously, foreign sourcing of consumer goods has increased substantially, with much of that increase driven by imports of large retailers from China. I study the role of direct imports from China in the transformation of the retail sector. To do so, I propose two changes to measuring concentration. Existing work on concentration tends to study its evolution using national, industry-level data, but these metrics provide an incomplete picture of the change given the local nature of competition in retail, and the growing importance of multi-product general merchandisers who compete across industries. I therefore construct new data on store-level revenue for all US retailers by 20 major categories of goods. While the aggregate product-level HHI more than doubled between 1997 and 2007, local concentration increased by only 36 percent. The new local-by-product concentration measures also enable me to perform an analysis of the role of globalization in increased concentration. I construct a measure of each small store's exposure to direct imports of large retailers. A store-level Bartik (1991) instrument suggests that a one percentage point increase in exposure to direct imports leads to a 0.7-1.7 percentage point increase in the probability a small store exits. Finally, I use a dynamic, continuous-time entry model to estimate the net effect of imports on the structure of competition in clothing sales, a product category highly exposed to direct imports. The model flexibly accounts for heterogeneous effects of imports and competition with other stores based on each store's size and product categories. I find that direct imports account for at least 14 percent of the decrease in the number of small clothing stores.

Publications

The Scope of U.S. Factoryless Manufacturing - 2015
The “factoryless manufacturing” (FM) business model is employed by a rising share of U.S. firms. Factoryless manufacturers outsource the fabrication of products but maintain control of the production process, own the associated intellectual property, and bear the entrepreneurial risk. FM is an important component in the role of U.S. firms in global manufacturing value chains. We estimate the scope of U.S. factoryless manufacturing using three approaches. First, we use financial reports for S&P 500 companies to show that FM is prevalent and increasing in the United States and that FM, once only common in the production of apparel, electronics, toys, and pharmaceuticals, has spread to a broader array of products. Second, we use Economic Census microdata to estimate that manufacturing value-added would have been 5 to 20 percent greater for 2007 if all FGPs were reclassified to manufacturing. Third, using a list of FM semiconductor companies matched to Economic Census microdata, we estimate that value-added would be 20 to 30 percent greater for semiconductor manufacturing, an industry where FM is especially prevalent, if FGPs were included. These results suggest that outsourcing and offshoring of product fabrication by U.S. firms is coupled with significant domestic production management. Thus, identifying FGPs in economic data is important for the study of fragmentation and globalization.