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Clustering or scattering: the underlying reason for regulating distance among retail outlets

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  • Joan-Ramon Borrell

    ()
    (Research Group on Governments and Markets (GiM) - Dep. de Política Econòmica - Institut d’Economia Aplicada (IREA), Universitat de Barcelona, Diagonal 690, 08034 Barcelona, Spain)

  • Laura Fernández-Villadangos

    ()
    (Research Group on Governments and Markets (GiM) - Dep. de Política Econòmica - Institut d’Economia Aplicada (IREA), Universitat de Barcelona, Diagonal 690, 08034 Barcelona, Spain.)

Abstract

Concerns on the clustering of retail industries and professional services in main streets had traditionally been the public interest rationale for supporting distance regulations. Although many geographic restrictions have been suppressed, deregulation has hinged mostly upon the theory results on the natural tendency of outlets to differentiate spatially. Empirical evidence has so far offered mixed results. Using the case of deregulation of pharmacy establishment in a region of Spain, we empirically show how pharmacy locations scatter, and that there is not rationale for distance regulation apart from the underlying private interest of very few incumbents.

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File URL: http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2010-12.pdf
File Function: First version, 2010
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File URL: http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2010-12.pdf
File Function: Revised version, 2010
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Bibliographic Info

Paper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2010-12.

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Length: 38 pages
Date of creation: Dec 2010
Date of revision: Dec 2010
Handle: RePEc:xrp:wpaper:xreap2010-12

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
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Web page: http://www.pcb.ub.edu/xreap
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Keywords: distance; location; regulation; retailing;

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  1. Victor Ginsburgh & André De Palma & Yorgo Papageorgiou & Jacques-François Thisse, 1995. "The principle of minimum differentiation holds under sufficient heterogeneity," ULB Institutional Repository 2013/3317, ULB -- Universite Libre de Bruxelles.
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