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The Causes and Consequences of Wal-Mart's Growth

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  • Emek Basker

Abstract

Wal-Mart is the largest retailer and the largest private employer in the United States. The competitive pressures created by large retailers have long been controversial, and Wal-Mart's growth has raised concerns about its economic impact on workers, communities, and competitors. This paper aims to dispel some of the myths regarding Wal-Mart and to replace them with a systematic accounting of what is known about Wal-Mart's impact on the U.S. and global economy. The paper begins by exploring the source of Wal-Mart's competitive advantage. It then examines some of the economic effects of Wal-Mart: how Wal-Mart stores affect local labor markets, consumer prices, product selection, local and global competitors, and suppliers. I then turn to Wal-Mart's interaction with public policy issues in matters of global trade as well as state and local legislation on wages, benefits, zoning, and subsidies.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.3.177
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 21 (2007)
Issue (Month): 3 (Summer)
Pages: 177-198

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Handle: RePEc:aea:jecper:v:21:y:2007:i:3:p:177-198

Note: DOI: 10.1257/jep.21.3.177
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  7. Emek Basker, 2007. "When Good Instruments Go Bad," Working Papers 0706, Department of Economics, University of Missouri.
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  18. Emek Basker & Pham Hoang Van, 2007. "Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0710, Department of Economics, University of Missouri.
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  22. Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 08-23r, Center for Economic Studies, U.S. Census Bureau, revised Sep 2011.
  23. Thomas J. Holmes, 2008. "The Diffusion of Wal-Mart and Economies of Density," NBER Working Papers 13783, National Bureau of Economic Research, Inc.
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