PLANT-LEVEL SCALE ECONOMIES AND INDUSTRIAL CONCENTRATION

The importance of plant scale economies as a determinant of concentrat ion differences among industries is examined using four-digit SIC data . Inter-industry concentration differences are explained by correspond ing differences in leading firm plant size (relative to industry), rat her than by the number of plants operated. Similarly, changes in indus trial concentration are more directly related to plant size changes th an to changes in the number of plants operated. This suggests that pla nt-level scale economies are more important than firm-level economies ar other types of efficiencies in determining concentration difference s among industries.