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Mom-and-Pop Meet Big Box: Complements or Substitutes?

In: Cities and Entrepreneurship

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Author Info

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

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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This chapter was published in:

  • Edward L. Glaeser & Stuart S. Rosenthal & William C. Strange, 2010. "Cities and Entrepreneurship," NBER Books, National Bureau of Economic Research, Inc, number glae09-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 11898.

    Handle: RePEc:nbr:nberch:11898

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    1. Emin M. Dinlersoz, 2004. "Firm Organization and the Structure of Retail Markets," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 13(2), pages 207-240, 06.
    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. 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.
    4. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2007. "The Effects of Wal-Mart on Local Labor Markets," IZA Discussion Papers 2545, Institute for the Study of Labor (IZA).
    5. Ronald S. Jarmin & Shawn D. Klimek & Javier Miranda, 2009. "The Role of Retail Chains: National, Regional and Industry Results," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 237-262 National Bureau of Economic Research, Inc.
    6. 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.
    7. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(5), pages 977-1009, October.
    8. 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.
    9. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527 Elsevier.
    10. Mohammad Arzaghi & J. Vernon Henderson, 2008. "Networking off Madison Avenue," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1011-1038.
    11. Holmes, Thomas J, 2001. "Bar Codes Lead to Frequent Deliveries and Superstores," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 708-25, Winter.
    12. Timothy Dunne & Shawn D. Klimek & Mark J. Roberts & Daniel Yi Xu, 2009. "The Dynamics of Market Structure and Market Size in Two Health Service Industries," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 303-327 National Bureau of Economic Research, Inc.
    13. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    14. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
    15. Emek Basker, 2003. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Labor and Demography, EconWPA 0303002, EconWPA, revised 11 Mar 2005.
    16. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, Econometric Society, vol. 76(6), pages 1263-1316, November.
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    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
    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:
    1. 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.
    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. 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.
    4. 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, USC Lusk Center for Real Estate 8513, USC Lusk Center for Real Estate.
    5. Lang, Åsa, 2012. "City Retailers’ Perceptions of Competition: A Choice Experiment," HUI Working Papers, HUI Research 58, HUI Research.
    6. 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.
    7. Richard Fabling & Arthur Grimes & Levente Timar, 2014. "Natural Selection: Firm Performance Following the Canterbury Earthquakes," Working Papers, Motu Economic and Public Policy Research 14_08, Motu Economic and Public Policy Research.
    8. Kambayashi, Ryo & Kato, Takao, 2013. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan’s Lost Decade," PRIMCED Discussion Paper Series, Institute of Economic Research, Hitotsubashi University 41, Institute of Economic Research, Hitotsubashi University.
    9. Daunfeldt, Sven-Olov & Mihaescu, Oana & Nilsson, Helena & Rudholm, Niklas, 2014. "What Happens When IKEA Comes to Town?," HUI Working Papers, HUI Research 100, HUI Research.
    10. Schuetz, Jenny & Kolko, Jed & Meltzer, Rachel, 2012. "Are poor neighborhoods “retail deserts”?," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(1-2), pages 269-285.
    11. Raffaella Sadun, 2008. "Does Planning Regulation Protect Independent Retailers?," CEP Discussion Papers dp0888, Centre for Economic Performance, LSE.
    12. Rachel Meltzer & Jenny Schuetz, 2010. "Bodegas or Bagel Shops? Neighborhood Differences in Retail & Household Services," Working Paper, USC Lusk Center for Real Estate 33, USC Lusk Center for Real Estate.
    13. Brianna Cardiff-Hicks & Francine Lafontaine & Kathryn Shaw, 2014. "Do Large Modern Retailers Pay Premium Wages?," NBER Working Papers 20313, National Bureau of Economic Research, Inc.
    14. 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.
    15. Toshihiro Matsumura & Noriaki Matsushima, 2009. "Regional restriction, strategic delegation, and welfare," ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 0761, Institute of Social and Economic Research, Osaka University.
    16. Vitor Miguel Ribeiro, 2014. "Strategic delegation in two-sided markets," FEP Working Papers 536, Universidade do Porto, Faculdade de Economia do Porto.

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