Market Structure in the Distribution Sector and Merchandise Trade
AbstractThis study aims at exploring how recent developments in the retail sector affect trade in consumer goods. It focuses on three areas of development: i) internationalisation; ii) market structure; and iii) the growing market share of retailers? private labels. It distinguishes between food and non-food products as there are significant differences between the sourcing patterns of these two product categories. The gravity model is extended by integrating a retail intermediary sector, and a novel estimation technique (zero inflated Poisson) is proposed. It is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. The rate of market concentration and the market share of private labels are both found to be negatively related to imports of food and positively related to imports of non-food consumer goods, but private labels tend to shift sourcing towards low-income countries. Lower tariffs yield a stronger import response in countries with a less concentrated retail sector, particularly for food items suggesting that competition policy and trade policy are complementary. In developing countries the entry of international retailers can have a positive impact on exports and product quality.
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Trade Policy Papers with number 68.
Date of creation: 01 Feb 2008
Date of revision:
retail sector; gravity model; trade in consumer goods;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-08 (All new papers)
- NEP-COM-2008-03-08 (Industrial Competition)
- NEP-INT-2008-03-08 (International Trade)
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