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The Causes and Consequences of Wal-Mart's Growth

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  • Emek Basker

Abstract

Wal-Mart is the largest retailer and the largest private employer in the United States. The competitive pressures created by large retailers have long been controversial, and Wal-Mart's growth has raised concerns about its economic impact on workers, communities, and competitors. This paper aims to dispel some of the myths regarding Wal-Mart and to replace them with a systematic accounting of what is known about Wal-Mart's impact on the U.S. and global economy. The paper begins by exploring the source of Wal-Mart's competitive advantage. It then examines some of the economic effects of Wal-Mart: how Wal-Mart stores affect local labor markets, consumer prices, product selection, local and global competitors, and suppliers. I then turn to Wal-Mart's interaction with public policy issues in matters of global trade as well as state and local legislation on wages, benefits, zoning, and subsidies.

Suggested Citation

  • Emek Basker, 2007. "The Causes and Consequences of Wal-Mart's Growth," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 177-198, Summer.
  • Handle: RePEc:aea:jecper:v:21:y:2007:i:3:p:177-198
    Note: DOI: 10.1257/jep.21.3.177
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.3.177
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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