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Wal-Mart's monopsony power in metro and non-metro labor markets


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  • Bonanno, Alessandro
  • Lopez, Rigoberto A.


This paper measures the potential degree of monopsony power that Wal-Mart can exert over retail workers using a dominant-firm model and nationwide, county-level data, presenting for the first time a measure of the company's potential anti-competitive behavior and detailed spatial impacts on wages, particularly for metropolitan and non-metropolitan counties. Empirical results show that, at the national level, Wal-Mart's potential wage markdown below the competitive level amounts to less than 3% on average. However, the potential markdowns in non-metropolitan counties are three-fold those in metropolitan counties and are highest in non-metro areas of the south and central states but negligible in northeastern states.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 4 ()
Pages: 569-579

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Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:569-579

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Keywords: Wal-Mart; Wages; Buying Power; Monopsony; Metro; Non-metro;

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