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Mom-and-Pop meet Big-Box: Complements or substitutes?

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  • Haltiwanger, John
  • Jarmin, Ron
  • Krizan, C.J.

Abstract

In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes' impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores - but only when the Big-Box activity is both in the immediate area and in the same detailed industry.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 67 (2010)
Issue (Month): 1 (January)
Pages: 116-134

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Handle: RePEc:eee:juecon:v:67:y:2010:i:1:p:116-134

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Big-Box stores Cities Small businesses;

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References

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  1. Ronald Jarmin & Shawn Klimek & Javier Miranda, 2005. "The Role of Retail Chains: National, Regional, and Industry Results," Working Papers 05-30, Center for Economic Studies, U.S. Census Bureau.
  2. Rosenthal, Stuart S. & Strange, William C., 2008. "The attenuation of human capital spillovers," Journal of Urban Economics, Elsevier, vol. 64(2), pages 373-389, September.
  3. Emek Basker, 2002. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Working Papers 0215, Department of Economics, University of Missouri, revised 14 Jan 2004.
  4. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
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  6. Thomas J. Holmes, 1999. "Bar codes lead to frequent deliveries and superstores," Staff Report 261, Federal Reserve Bank of Minneapolis.
  7. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527 Elsevier.
  8. Jerry Hausman & Ephraim Leibtag, 2005. "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart," NBER Working Papers 11809, National Bureau of Economic Research, Inc.
  9. David Neumark & Junfu Zhang & Stephen Ciccarella, 2006. "The Effects of Wal-Mart on Local Labor Markets," Working Papers 060711, University of California-Irvine, Department of Economics.
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  12. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
  13. Stuart S. Rosenthal & William C. Strange, 1999. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 14, Center for Policy Research, Maxwell School, Syracuse University.
  14. Lucia Foster & John Haltiwanger & C. J. Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November.
  15. J. Vernon Henderson & Mohammad Arzaghi, 2005. "Networking Off Madison Avenue," Working Papers 05-15, Center for Economic Studies, U.S. Census Bureau.
  16. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Do big boxes displace mom-and-pop stores?
    by Economic Logician in Economic Logic on 2009-11-18 15:10:00
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Cited by:
  1. Courtemanche, Charles & Carden, Art, 2011. "Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity," Journal of Urban Economics, Elsevier, vol. 69(2), pages 165-181, March.
  2. Edward L. Glaeser & Stuart S. Rosenthal & William C. Strange, 2009. "Urban Economics and Entrepreneurship," NBER Working Papers 15536, National Bureau of Economic Research, Inc.
  3. Jenny Schuetz & Jed Kolko & Rachel Meltzer, 2010. "Is the 'Shop Around the Corner' a Luxury or a Nuisance? The relationship between income and neighborhood retail patterns," Working Paper 8513, USC Lusk Center for Real Estate.
  4. Vitor Miguel Ribeiro, 2014. "Strategic delegation in two-sided markets," FEP Working Papers 536, Universidade do Porto, Faculdade de Economia do Porto.
  5. Toshihiro Matsumura & Noriaki Matsushima, 2009. "Regional restriction, strategic delegation, and welfare," ISER Discussion Paper 0761, Institute of Social and Economic Research, Osaka University.
  6. C. J. Krizan & Adela Luque & Alice Zawacki, 2014. "The Effect Of Employer Health Insurance Offering On The Growth And Survival Of Small Business Prior To The Affordable Care Act," Working Papers 14-22, Center for Economic Studies, U.S. Census Bureau.
  7. Rachel Meltzer & Jenny Schuetz, 2010. "Bodegas or Bagel Shops? Neighborhood Differences in Retail & Household Services," Working Paper 33, USC Lusk Center for Real Estate.
  8. Raffaella Sadun, 2008. "Does Planning Regulation Protect Independent Retailers?," CEP Discussion Papers dp0888, Centre for Economic Performance, LSE.
  9. Kambayashi, Ryo & Kato, Takao, 2013. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan’s Lost Decade," CEI Working Paper Series 2013-01, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  10. Schuetz, Jenny & Kolko, Jed & Meltzer, Rachel, 2012. "Are poor neighborhoods “retail deserts”?," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 269-285.
  11. Lang, Åsa, 2012. "City Retailers’ Perceptions of Competition: A Choice Experiment," HUI Working Papers 58, HUI Research.
  12. Ellickson, Paul B. & Grieco, Paul L.E., 2013. "Wal-Mart and the geography of grocery retailing," Journal of Urban Economics, Elsevier, vol. 75(C), pages 1-14.
  13. Andrea Pozzi, 2011. "Who Is Hurt by E-Commerce? Crowding out and Business Stealing in Online Grocery," EIEF Working Papers Series 1114, Einaudi Institute for Economics and Finance (EIEF), revised Sep 2011.
  14. Daunfeldt, Sven-Olov & Mihaescu, Oana & Nilsson, Helena & Rudholm, Niklas, 2014. "What Happens When IKEA Comes to Town?," HUI Working Papers 100, HUI Research.

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