Transportation and Infrastructure, Retail Clustering, and Local Public Finance: Evidence from Wal-Mart's Expansion
AbstractThe author examines the role highway infrastructure and local property tax rate variability play in retail agglomeration in Indiana from 1988 through 2003. To account for data errors and the potential endogeneity of taxes and infrastructure on retail agglomeration, he introduces a unique identification strategy that exploits the entrance timing and location of Wal-Mart stores in Indiana. Using a time-series cross-sectional model of Indiana’s 92 counties from 1988 through 2003, he estimates the impact highway infrastructure, property taxes, and big-box competition have in creating regional agglomerations. Among two separate specifications and a full and rural-only set of the data, the author finds considerable agreement in the results. In the full sample, he finds no relationship between property tax rates or highway infrastructure and retail agglomeration. Within the non-metropolitan statistical area (MSA) counties, this relationship is very modest, though it possesses considerable statistical certainty. Highway impacts within the non-MSA counties are significant and positively related to retail agglomeration, with the presence of highways explaining about 10 percent of total agglomeration variability. (JEL R11, R53)
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52.
Date of creation: 2006
Date of revision:
Publication status: Published in Regional Economic Development 2.2(2006): pp. 100-114
Infrastructure; endogeneity; taxation; Wal-Mart;
Other versions of this item:
- Michael J. Hicks, 2006. "Transportation and infrastructure, retail clustering, and local public finance: evidence from Wal-Mart's expansion," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 100-114.
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-04 (All new papers)
- NEP-GEO-2006-12-04 (Economic Geography)
- NEP-URE-2006-12-04 (Urban & Real Estate Economics)
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