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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Paper provided by Instituto de Economía. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number
307.
Length: Date of creation: 2006 Date of revision: Publication status: Published as "Do Large Retailers Affect Employment? Evidence from an Emerging Economy", Applied Economic Letters, 2007, Forthcoming Handle: RePEc:ioe:doctra:307
Find related papers by JEL classification: L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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