Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 939: A Dynamic Analysis of Entry Regulations and Productivity in Retail Trade

Florin Maican () and Matilda Orth ()
Additional contact information
Florin Maican: Research Institute of Industrial Economics (IFN), Postal: and Department of Economics, School of Business, Economics and Law,University of Gothenburg
Matilda Orth: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, 102 15 Stockholm, Sweden

Abstract: Quantifying possible inefficiencies stemming from regulation is important to both policymakers and researchers. We use a dynamic structural model to evaluate the role of local market entry regulations in the productivity of retail trade. Our model is flexible with respect to how local market regulations influence store productivity and controls for demand in local markets. We combine the structural approach with detailed data on all stores in the Swedish retail industry. The results show that more liberal entry regulations increase future productivity and that the increase in productivity is larger for small stores and small markets than for large stores and large markets.

Keywords: Retail Trade; Regulation; Imperfect Competition; Dynamic Structural Model

JEL-codes: L11; L81; L88; O30

82 pages, First version: November 14, 2012. Revised: December 8, 2014. Earlier revisions: April 12, 2014.

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