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Do Large Retailers Affect Employment? Evidence from an Emerging Economy

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  • Rosario Rivero
  • Rodrigo Vergara

    ()
    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Abstract

This paper studies the effect of the emergence of large retailers (hypermarkets and department stores) on employment in the commerce sector in the regions of Chile. We use a panel with quarterly data from eleven Chilean regions for the period 1996-2004. Our results indicate that the entry of large retailers produces a discrete increase in employment in the commerce sector in the quarter that the entry occurs. We also find that there is an additional positive effect on employment throughout the year entry occurs, suggesting that suppliers or other parts of the chain of production follow the large retailer into the local market. However, after the first year of the entry there is a partial reversion, suggesting that smaller retailers exit or contract in response to the entry of the large retailer. The net effect on employment of the entry of a large retailer is an increase of 300 jobs.

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Bibliographic Info

Paper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 307.

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Date of creation: 2006
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Publication status: Published as "Do Large Retailers Affect Employment? Evidence from an Emerging Economy", Applied Economic Letters, 2007, Forthcoming
Handle: RePEc:ioe:doctra:307

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Keywords: Entry; employment; retail;

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  1. Emek Basker, 2004. "Selling a Cheaper Mousetrap: Wal-Marts Effect on Retail Prices," Working Papers 0401, Department of Economics, University of Missouri, revised 16 Mar 2004.
  2. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
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Cited by:
  1. Loreto Lira & Rosario Rivero & Rodrigo Vergara, 2007. "Entry and Prices: Evidence from the Supermarket Sector," Review of Industrial Organization, Springer, vol. 31(4), pages 237-260, December.

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