Working Paper Series
Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing
() and Matilda Orth
Abstract: The entry of large (“big-box”) stores and the accompanying
drastic decrease in the overall number of stores represent a striking trend
in retail. We use a dynamic model to measure the impact of the entry of
large stores on incumbents’ productivity separate from demand while
accounting for local markets and the endogeneity of entry. Using data on
all retail food stores in Sweden, we find that incumbents’ productivity
increases after the entry of large stores and that the magnitude of the
increase declines toward the upper part of the productivity distribution.
Our findings highlight that large entrants play a crucial role in driving
Keywords: Retail markets; Imperfect competition; Industry dynamics; Productivity; Dynamic structural model; (follow links to similar papers)
JEL-Codes: C24; L11; L50; L81; O30; (follow links to similar papers)
72 pages, January 18, 2012, Revised August 31, 2015
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