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Has Wal-Mart Buried Mom and Pop?: The Impact of Wal-Mart on Self Employment and Small Establishments in the United States

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  • Russell S. Sobel

    (Department of Economics & Entrepreneurship Center, West Virginia University)

  • Andrea M. Dean

    (Department of Economics & Entrepreneurship Center, West Virginia University)

Abstract

Saving traditional small ‘mom and pop’ businesses has been a justification for political and court decisions preventing Wal-Mart from opening new stores virtually everywhere across the United States. We present the first rigorous econometric investigation of how Wal-Mart actually impacts the small business sector. We examine the rate of self-employment and the number of smallemployer establishments using both time-series and cross-sectional data. Contrary to popular belief, our results suggest that the process of creative destruction unleashed by Wal-Mart has had no statistically significant long-run impact on the overall size and profitability of the small business sector in the United States.

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File URL: http://www.be.wvu.edu/phd_economics/pdf/06-05.pdf
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Bibliographic Info

Paper provided by Department of Economics, West Virginia University in its series Working Papers with number 06-05 Classification- JEL: L81, D59, C21.

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Length: 35 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:wvu:wpaper:06-05

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  1. Schiller, Bradley R & Crewson, Philip E, 1997. "Entrepreneurial Origins: A Longitudinal Inquiry," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 523-31, July.
  2. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-65, July.
  3. Steven F. Kreft & Russell S. Sobel, 2005. "Public Policy, Entrepreneurship, And Economic Freedom," Cato Journal, Cato Journal, Cato Institute, vol. 25(3), pages 595-616, Fall.
  4. Dubin, Robin A, 1988. "Estimation of Regression Coefficients in the Presence of Spatially Autocorrelated Error Terms," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 466-74, August.
  5. Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
  6. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-64, August.
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Cited by:
  1. Hicks, Michael, 2006. "Transportation and Infrastructure, Retail Clustering, and Local Public Finance: Evidence from Wal-Mart's Expansion," MPRA Paper 52, University Library of Munich, Germany.
  2. Brooks, Lara & Whitacre, Brian E. & Muske, Glenn & Woods, Michael D., 2008. "Entrepreneurial Communities in Rural Oklahoma," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6829, Southern Agricultural Economics Association.
  3. Fernando Borraz & Juan Dubra & Daniel Ferrés & Leandro Zipitría, 2013. "Supermarket Entry and The Survival of Small Stores," Documentos de Trabajo/Working Papers 1303, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
  4. King, Roger & Peng, Winnie Qian, 2013. "The effect of industry characteristics on the control longevity of founding-family firms," Journal of Family Business Strategy, Elsevier, vol. 4(4), pages 281-295.
  5. Courtemanche, Charles & Carden, Art, 2009. "The skinny on big box retailing: Wal-Mart, warehouse clubs, and obesity," MPRA Paper 25326, University Library of Munich, Germany.
  6. Ting Zhu & Vishal Singh & Anthony Dukes, 2011. "Local competition, entry, and agglomeration," Quantitative Marketing and Economics, Springer, vol. 9(2), pages 129-154, June.
  7. Courtemanche, Charles & Carden, Art, 2011. "Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices," Working Papers 11-7, University of North Carolina at Greensboro, Department of Economics.
  8. Kolko, Jed & Neumark, David, 2009. "Does Local Business Ownership Insulate Cities from Economic Shocks?," IZA Discussion Papers 4415, Institute for the Study of Labor (IZA).
  9. James LeSage & Matthew Dominguez, 2012. "The importance of modeling spatial spillovers in public choice analysis," Public Choice, Springer, vol. 150(3), pages 525-545, March.
  10. Courtemanche, Charles & Carden, Art, 2011. "Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity," Journal of Urban Economics, Elsevier, vol. 69(2), pages 165-181, March.

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