Dominic Smith

Contact Information

Dominic A Smith
ds@dominic-smith.com
Work Email
smith.dominic@bls.gov
Research Economist
Bureau of Labor Statistics (BLS)

Current CV

Work in Progress

The Evolution of U.S. Retail Concentration
Email for old draft. New draft waiting on Census disclosure.
Increases in concentration across various sectors are a salient feature of industry dynamics in the U.S. and other developed countries during the past 30 years. This trend is particularly notable in the U.S. retail sector, which has changed over the past three decades from one with many small local firms to one dominated by large national firms. Existing work on concentration focuses on nationwide changes (the national Herfindahl-Hirschman index more than doubled between 1997 and 2007). Yet, less is known about the dynamics of concentration in local markets, and the relationship between local and national trends. %and the growing importance of multi-product general merchandisers who compete across industries. We address this issue by providing a novel decomposition of national concentration into a local and a cross-market component. We use new data on store-level revenue for all U.S. retailers by 20 major categories of goods to measure concentration in local markets at the product level. Despite local concentration increasing during the last three decades (the Herfindahl-Hirschman index increased 50 percent), we show that the rise in national concentration is driven almost exclusively by the expansion of large firms into more markets, with changes in local concentration having little impact on national trends.

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.

Inactive Project

Concentration and Foreign Sourcing in the U.S. Retail Sector
Results in this paper have been moved into other projects.