Regulation and UK Retailing Productivity: Evidence from Micro Data
AbstractWe use UK micro data to explore whether planning regulation reduced UK retailing productivity growth between 1997 and 2003. We document a shift to smaller shops, particularly within supermarket chains, following a regulatory change in 1996 which increased the costs of opening large stores. This might have caused a slowdown in productivity growth if firms (a) lose scale advantages, by moving to smaller stores and (b) lose scope advantages if existing organisational knowledge appropriate to larger stores is not perfectly substitutable with the organisational capital required to run smaller stores. Our micro data shows a relation, controlling for fixed effects, between chain-level TFP for multi-store chains and various measures of the size of the stores within the chain. Our results suggest the fall in within-chain shop sizes was associated with a lowering of chain TFP by about 0.4% pa, about 40% of the post-1995 slowdown in UK retail TFP growth. The foregone productivity works out at about £80,000 per small chain supermarket store.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4028.
Length: 44 pages
Date of creation: Feb 2009
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Jonathan Haskel & Raffaella Sadun, 2012. "Regulation and UK Retailing Productivity: Evidence from Microdata," Economica, London School of Economics and Political Science, vol. 79(315), pages 425-448, 07.
- Haskel, Jonathan & Sadun, Raffaella, 2009. "Regulation and UK Retailing Productivity: Evidence from Micro Data," CEPR Discussion Papers 7140, C.E.P.R. Discussion Papers.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-14 (All new papers)
- NEP-EFF-2009-03-14 (Efficiency & Productivity)
- NEP-REG-2009-03-14 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Timmer, Marcel & Inklaar, Robert, 2005.
"Productivity differentials in the U.S. and EU distributive trade sector: statistical myth or reality,"
GGDC Research Memorandum
200576, Groningen Growth and Development Centre, University of Groningen.
- Timmer, Marcel P. & Inklaar, Robert, 2005. "Productivity differentials in the U.S. and EU distributive trade sector: statistical myth or reality," CCSO Working Papers 200501, University of Groningen, CCSO Centre for Economic Research.
- Rachel Griffith & Heike Harmgart, 2005. "Retail productivity," IFS Working Papers W05/07, Institute for Fiscal Studies.
- Oulton,Nicholas & O'Mahony,Mary, 1994. "Productivity and Growth," Cambridge Books, Cambridge University Press, number 9780521453455, December.
- Victor Aguirregabiria & Pedro Mira & Hernan Roman, 2007.
"An Estimate Dynamic Model of Entry, Exit, and Growth in Oligopoly Retail Markets,"
American Economic Review,
American Economic Association, vol. 97(2), pages 449-454, May.
- Victor Aguirregabiria & Pedro Mira & Hernan Roman, 2007. "An Estimable Dynamic Model of Entry, Exit and Growth in Oligopoly Retail Markets," Working Papers tecipa-275, University of Toronto, Department of Economics.
- Emek Basker & Shawn Klimek & Pham Hoang Van, 2008.
"Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format,"
08-23r, Center for Economic Studies, U.S. Census Bureau, revised Sep 2011.
- Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It - The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 0809, Department of Economics, University of Missouri, revised 30 Sep 2010.
- Raffaella Sadun, 2014.
"Does Planning Regulation Protect Independent Retailers?,"
NBER Working Papers
19797, National Bureau of Economic Research, Inc.
- Raffaella Sadun, 2008. "Does Planning Regulation Protect Independent Retailers?," CEP Discussion Papers dp0888, Centre for Economic Performance, LSE.
- Griffith, Rachel & Harmgart, Heike, 2008. "Supermarkets and Planning Regulation," CEPR Discussion Papers 6713, C.E.P.R. Discussion Papers.
- Ronald Jarmin & Shawn Klimek & Javier Miranda, 2005.
"The Role of Retail Chains: National, Regional, and Industry Results,"
05-30, Center for Economic Studies, U.S. Census Bureau.
- 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.
- Bond, Stephen & Van Reenen, John, 2007. "Microeconometric Models of Investment and Employment," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 65 Elsevier.
- Steve Bond & Måns Söderbom, 2005.
"Adjustment costs and the identification of Cobb Douglas production functions,"
IFS Working Papers
W05/04, Institute for Fiscal Studies.
- Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Papers 2005-W04, Economics Group, Nuffield College, University of Oxford.
- Lang, Åsa, 2012. "City Retailers’ Perceptions of Competition: A Choice Experiment," HUI Working Papers 58, HUI Research.
- Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, vol. 49(1), pages 17-29.
- Crafts, Nicholas, 2012. "Creating Competitive Advantage: Policy Lessons from History," CAGE Online Working Paper Series 90, Competitive Advantage in the Global Economy (CAGE).
- Crafts, Nicholas, 2011.
"British Relative Economic Decline Revisited,"
CEPR Discussion Papers
8384, C.E.P.R. Discussion Papers.
- Max Nathan & Henry G. Overman, 2011. "What We Know (and Don't Know) About the Links between Planning and Economic Performance," SERC Policy Papers 010, Spatial Economics Research Centre, LSE.
- Paul Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2013.
"Land Use Regulation and Productivity - Land Matters: Evidence from a UK Supermarket Chain,"
SERC Discussion Papers
0138, Spatial Economics Research Centre, LSE.
- Cheshire, Paul C. & Hilber, Christian & Kaplanis, Ioannis, 2012. "Land use regulation and productivity - Land matters: Evidence from a UK Supermarket chain," Working Papers 2072/196650, Universitat Rovira i Virgili, Department of Economics.
- Eliana Viviano & Luciana Aimone Gigio & Emanuela Ciapanna & Daniele Coin & Fabrizio Colonna & Federica Lagna & Raffaele Santioni, 2012. "The retail trade sector and the food industry in Italy," Questioni di Economia e Finanza (Occasional Papers) 119, Bank of Italy, Economic Research and International Relations Area.
- Dan Corry & Anna Valero & John Van Reenen, 2011.
"UK Economic Performance Since 1997: Growth, Productivity and Jobs,"
CEP Special Papers
24, Centre for Economic Performance, LSE.
- Dan Corry & Anna Valero & John Van Reenen, 2011. "UK economic performance since 1997: growth, productivity and jobs," LSE Research Online Documents on Economics 47521, London School of Economics and Political Science, LSE Library.
- Horst Raff & Nicolas Schmitt, 2009.
"Imports, Pass-Through, and the Structure of Retail Markets,"
CESifo Working Paper Series
2817, CESifo Group Munich.
- Horst Raff & Nicolas Schmitt, 2009. "Imports, Pass-Through, and the Structure of Retail Markets," Kiel Working Papers 1556, Kiel Institute for the World Economy.
- Priit Vahter & Jaan Masso, 2011.
"The Link between Innovation and Productivity in Estonia’s Service Sectors,"
William Davidson Institute Working Papers Series
wp1012, William Davidson Institute at the University of Michigan.
- Jaan Masso & Priit Vahter, 2012. "The link between innovation and productivity in Estonia's services sector," The Service Industries Journal, Taylor & Francis Journals, vol. 32(16), pages 2527-2541, December.
- Jaan Masso & Priit Vahter, 2011. "The Link Between Innovation And Productivity In Estonian Service Sector," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 80, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Maican, Florin & Orth, Matilda, 2012. "A Dynamic Analysis of Regulation and Productivity in Retail Trade," Working Paper Series 939, Research Institute of Industrial Economics.
- Maican, Florin & Orth, Matilda, 2012.
"Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing,"
Working Paper Series
898, Research Institute of Industrial Economics.
- Maican, Florin & Orth, Matilda, 2008. "Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing," Working Papers in Economics 328, University of Gothenburg, Department of Economics.
- Raff, Horst & Schmitt, Nicolas, 2011.
"Imports and the structure of retail markets,"
Economics Working Papers
2011,05, Christian-Albrechts-University of Kiel, Department of Economics.
- Paul C. Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2012. "Evidence from a UK supermarket chain," Working Papers 2012/15, Institut d'Economia de Barcelona (IEB).
- Harchaoui, Tarek M., 2012. "The Europe-U.S. Retail Trade Productivity Gap in a Rear-view Mirror," GGDC Research Memorandum GD-127, Groningen Growth and Development Centre, University of Groningen.
- Paul Cheshire & Christian Hilber & Ioannis Kaplanis, 2011. "Land Use Regulation & Retail: Space Constraints and Total Factor Productivity," ERSA conference papers ersa10p1084, European Regional Science Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.