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No 118:
Big-box retail entry in urban and rural areas: Are there productivity spillovers to incumbent retailers?

Johan Håkansson, Yujiao Li, Oana Mihaescu and Niklas Rudholm ()

Abstract: This paper empirically measures the potential spillover effects of big-box retail entry on the productivity of incumbent retailers in the entry regions, and investigates whether the effects differ depending on the size of the new establishment relative to the size of the local market. The results indicate that big-box entry increases the productivity of incumbent firms in two of three rural entry regions where the IKEA is large relative to the local retail market, while no productivity spillover effects could be found in the case of the urban IKEA entry in Gothenburg.

Keywords: Big-box entry; Production functions; Retail productivity; Retail entry subsidies; (follow links to similar papers)

JEL-Codes: D22; L11; L25; L26; P25; (follow links to similar papers)

26 pages, May 24, 2016

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