Scandinavian Working Papers in Economics
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No 100:
What Happens When IKEA Comes to Town?

Sven-Olov Daunfeldt (), Oana Mihaescu, Helena Nilsson and Niklas Rudholm

Abstract: Using data from 2000-2011, the effects of a new IKEA store on retail revenues, employment, and inflow of purchasing power in the entry municipalities, as well as in neighboring municipalities were investigated. A propensity score matching method was used to find non IKEA entry municipalities that were as similar as possible to the entry municipalities based on the situation before entry. Our results indicate that IKEA-entry increased entry-municipality durable-goods revenues by about 20% and employment by about 17%. Only small and, in most cases, statistically insignificant effects were found in neighboring municipalities.

Keywords: big-box retailing; retail revenues; job creation; employment; propensity-score matching; panel data; (follow links to similar papers)

JEL-Codes: D22; L11; L25; L26; (follow links to similar papers)

27 pages, March 5, 2014

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This paper is published as:
Daunfeldt, Sven-Olov, Oana Mihaescu, Helena Nilsson and Niklas Rudholm, (2015), 'What Happens When IKEA Comes to Town?', Regional Studies, November

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