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A Quasi-Experimental Test of Large Retail Store Impacts on Regional Labor Markets: The Case of Cabela's Retail Outlets

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Author Info

  • Hicks, Michael J.

Abstract

This study applies a quasi-experimental method for performing economic impact analy-sis of a firm‟s entrance on regional labor markets. The impact studied is the entrance of a Ca-bela‟s retail outlet in seven U.S. counties from 1998 through 2003. Using a time-space dynamic model in a monthly panel data setting, this paper evaluates the impact of new firm entrance on employment, unemployment rates and labor forces in 7 control and 7 treatment counties. I include an endogeneity test, rejecting growth and labor market endogeneity in the entrance of Cabela‟s. The findings suggest that the entrance of a large-scale specialty retail store has no persistent impact on employment in the effected or surrounding counties. These findings suggest labor market constraints. More simply retail wages are not sufficient to increase labor market participation or alter economic migration patterns in the affected counties. This paper recommends that benefit cost analysis be performed when public resources are dedicated to infrastructure or tax incentive efforts.

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File URL: http://purl.umn.edu/132412
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Bibliographic Info

Article provided by Mid-Continent Regional Science Association in its journal Journal of Regional Analysis and Policy.

Volume (Year): 37 (2007)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:ags:jrapmc:132412

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Web page: http://jrap-journal.org/index.htm
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Related research

Keywords: Labor and Human Capital;

References

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  1. Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
  2. Michael J. Hicks & Kristy Wilburn, 2005. "The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," Urban/Regional 0511011, EconWPA.
  3. Todd M. Gabe & David S. Kraybill, 2002. "The Effect of State Economic Development Incentives on Employment Growth of Establishments," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 703-730.
  4. Stone, Kenneth E. & Deller, Steven C. & McConnon, James C. Jr., 1992. "The New Retail Environment in Maine," Staff General Research Papers 11255, Iowa State University, Department of Economics.
  5. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2008. "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, Elsevier, vol. 63(2), pages 405-430, March.
  6. Barnes, Nora Ganim & Connell, Allison & Hermenegildo, Lisa & Mattson, Lucinda, 1996. "Regional differences in the economic impact of Wal-Mart," Business Horizons, Elsevier, vol. 39(4), pages 21-25.
  7. Stone, Kenneth E., 1995. "Competing With the Retail Giants," Staff General Research Papers 5307, Iowa State University, Department of Economics.
  8. Emek Basker, 2003. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Labor and Demography 0303002, EconWPA, revised 11 Mar 2005.
  9. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
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Cited by:
  1. Zhang, Chuanchuan, 2011. "大型外资零售商的进入对中国地区劳动力市场的影响
    [Impact of Entry of Large Foreign Retailers on Local Labor Markets in China]
    ," MPRA Paper 43912, University Library of Munich, Germany, revised Apr 2012.

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