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Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning

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  • Beck, Jonathan
  • Grajek, Michal
  • Wey, Christian

Abstract

This paper presents a set of panel data to study the diffusion of retail checkout barcode scanning in ten European countries over the period 1981-1996. Estimates from a standard diffusion model suggest that countries differ most in the long-run diffusion level of barcode scanning and less in timing or diffusion speed. We present evidence that the emergence of hypermarkets raises competitive intensity and use hypermarket data, among other variables, in a pooled estimation. Results suggest that hypermarket competition reduces the long-run adoption level in retailing. In particular, the emergence of hypermarkets seems to deepen retail segmentation by inducing potential adopters (e.g. supermarkets) to exit the market and/or by discouraging adoption by other retail formats. Consistent with expectations, scale and income effects spur IT diffusion and there is a classic substitution effect: when wages rise, diffusion of a labour-saving technology such as barcode-scanning is more intense. We do not find a significant impact of employment protection legislation.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5386.

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Date of creation: Nov 2005
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Handle: RePEc:cpr:ceprdp:5386

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Keywords: hypermarkets; IT diffusion; retail competition;

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References

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Cited by:
  1. Grajek, Michal & Kretschmer, Tobias, 2009. "Usage and diffusion of cellular telephony, 1998-2004," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 27(2), pages 238-249, March.
  2. Jonathan Beck & Michal Grajek & Christian Wey, 2011. "Estimating level effects in diffusion of a new technology: barcode scanning at the checkout counter," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 43(14), pages 1737-1748.

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