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

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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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File URL: ftp://ftp2.census.gov/ces/wp/2009/CES-WP-09-34.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 09-34.

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Length: 46 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:cen:wpaper:09-34

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Keywords: Big-Boxes; Small Business; Retail Trade; Firm Location; Structural Change;

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References

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  1. 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.
  2. 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.
  3. David Neumark & Junfu Zhang & Stephen Ciccarella, 2005. "The Effects of Wal-Mart on Local Labor Markets," NBER Working Papers 11782, National Bureau of Economic Research, Inc.
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  6. 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.
  7. Ronald Jarmin & Shawn Klimek & Javier Miranda, 2005. "The Role of Retail Chains: National, Regional, and Industry Results," Working Papers, Center for Economic Studies, U.S. Census Bureau 05-30, Center for Economic Studies, U.S. Census Bureau.
  8. Emek Basker, 2002. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Working Papers, Department of Economics, University of Missouri 0215, Department of Economics, University of Missouri, revised 14 Jan 2004.
  9. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers, Center for Policy Research, Maxwell School, Syracuse University 56, Center for Policy Research, Maxwell School, Syracuse University.
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  11. 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.
  12. 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.
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  15. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers, Center for Economic Studies, U.S. Census Bureau 02-17, Center for Economic Studies, U.S. Census Bureau.
  16. Mohammad Arzaghi & J. Vernon Henderson, 2008. "Networking off Madison Avenue," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1011-1038.
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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. Lang, Åsa, 2012. "City Retailers’ Perceptions of Competition: A Choice Experiment," HUI Working Papers, HUI Research 58, HUI Research.
  2. 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.
  3. Glaeser, Edward L. & Rosenthal, Stuart S. & Strange, William C., 2010. "Urban economics and entrepreneurship," Journal of Urban Economics, Elsevier, vol. 67(1), pages 1-14, January.
  4. 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.
  5. 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.
  6. 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.
  7. Kambayashi, Ryo & Kato, Takao, 2012. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan's Lost Decade," IZA Discussion Papers 6666, Institute for the Study of Labor (IZA).
  8. 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.
  9. Vitor Miguel Ribeiro, 2014. "Strategic delegation in two-sided markets," FEP Working Papers 536, Universidade do Porto, Faculdade de Economia do Porto.
  10. 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.
  11. Raffaella Sadun, 2008. "Does planning regulation protect independent retailers?," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 28503, London School of Economics and Political Science, LSE Library.
  12. 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.
  13. 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.
  14. 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, Center for Economic Studies, U.S. Census Bureau 14-22, Center for Economic Studies, U.S. Census Bureau.
  15. 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.
  16. 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.

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