This project produced several programmatic benefits that enhance the Census Bureau’s ability to measure and analyze market concentration and industry structure. 

Researchers developed new measures of national market concentration based on employment, payroll, and revenue shares of the top 1 percent and 10 percent of firms within industries. These measures improve cross-industry comparability compared to traditional measures based on fixed numbers of firms (such as the top 4, 8, 20, or 50 firms), which can be difficult to interpret when industries differ substantially in the number of firms. 

For example, according to published data from the 2022 Economic Census, the Full-Service Restaurants industry included more than 224,000 firms, with the 50 largest firms accounting for 15 percent of industry sales. By comparison, the General Medical and Surgical Hospitals industry included approximately 2,280 firms, with the 50 largest firms accounting for 34.6 percent of sales. These differences illustrate how fixed-firm concentration measures can obscure meaningful cross-industry comparisons. 

Researchers developed alternative measures of local market concentration, including: 

• Employment share of the largest firm within metropolitan or county-level markets 

• Herfindahl–Hirschman Index calculations at both national and local levels 

These measures provide improved insight into industries with highly localized competition, such as restaurants and hospitals, where national concentration measures may not fully reflect competitive dynamics. 

Although confidentiality protections limit public release of detailed concentration estimates, the project produced replication code that enables other researchers and Census program areas to reproduce and extend the analysis. The replication package for "The Industrial Revolution in Services" is publicly available through the Harvard Dataverse repository.  

This project generated multiple high-impact research findings advancing understanding of innovation, firm growth, and global economic dynamics. 

Using more than 25 years of establishment-level data from the Longitudinal Business Database linked with sales data from the Economic Censuses, researchers examined firm expansion patterns across service industries. The analysis showed that firms in sectors such as finance, retail trade, health care, restaurants, and business services expanded rapidly by entering new geographic markets. 

The findings suggest that many service-sector firms have reduced marginal expansion costs through investments in fixed-cost technologies, including centralized research and development, standardized training programs, and remote monitoring systems. These investments disproportionately benefit leading firms, allowing them to scale operations nationally. 

The research also finds that expansion by large service firms often reduces concentration in local markets while generating previously unmeasured productivity gains. These patterns mirror manufacturing-sector transformations observed during the Second Industrial Revolution. 

This study developed a two-country model examining how international trade and innovation interact through creative destruction. The model incorporates firm-level innovation processes and cross-border idea transmission through trade. 

Using confidential Census of Manufactures data available through the FSRDC network combined with international manufacturing data, researchers calibrated the model to match observed trade patterns, wage dispersion, and productivity differences across firms. 

The results suggest that trade-driven knowledge spillovers generate substantial long-term economic gains. Model simulations estimate that U.S. consumption levels are approximately 31 percent higher than they would be under autarky, with even larger gains estimated for other OECD countries. The findings highlight the critical role of international knowledge diffusion in sustaining long-term economic growth. 

This research examines how firm entry costs evolve as economies grow and productivity increases. Using published national and state-level Business Dynamics Statistics data as well as confidential establishment-level manufacturing data from the Economic Censuses available through the FSRDC network, researchers found that average firm employment tends to remain stable or increase as labor productivity rises. 

These patterns suggest that the cost of starting new firms increases alongside productivity growth. The findings indicate that firm entry may be labor-intensive and that technological progress does not necessarily reduce entry barriers through knowledge spillovers. 

Policy implications include the possibility that productivity-enhancing technological change may not automatically increase firm creation or product variety, limiting potential amplification of economic growth through new firm entry.