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Supermarket Entry and its effect on small stores in Montevideo, 1998 to 2007

Author

Listed:
  • Fernando Borraz

    () (Banco Central del Uruguay)

  • Juan Dubra

    () (Universidad de Montevideo (Uruguay))

  • Daniel Ferrés

    () (Universidad de Montevideo (Uruguay))

  • Leandro Zipitría

    () (Universidad de Montevideo (Uruguay)
    Dirección General de Comercio, Ministerio de Economía y Finanzas (Uruguay))

Abstract

We analyze the effect of supermarket entry on small grocery retailers’ exit in the retailing sector in Montevideo between 1998 and 2007. We show that the entry of one supermarket in a small store’s neighborhood increases its chance exiting the market in that year by 1.2% on average. The result is robust to several model specifications, and varying definitions of what constitutes a supermarket.

Suggested Citation

  • Fernando Borraz & Juan Dubra & Daniel Ferrés & Leandro Zipitría, 2009. "Supermarket Entry and its effect on small stores in Montevideo, 1998 to 2007," Documentos de trabajo 2009005, Banco Central del Uruguay.
  • Handle: RePEc:bku:doctra:2009005
    as

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    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/5.2009.pdf
    File Function: First version, 2009
    Download Restriction: no

    References listed on IDEAS

    as
    1. Rodríguez, Elsa Mirta M. & Berges, Miriam & Casellas, Karina & Di Paola, Rosángela & Lupín, Beatriz & Garrido, Laura & Gentile, Natacha, 2002. "Consumer behaviour and supermarkets in Argentina," Nülan. Deposited Documents 392, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. Marco Manacorda & Edward Miguel & Andrea Vigorito, 2011. "Government Transfers and Political Support," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 1-28, July.
    3. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
    4. Viviano, Eliana, 2008. "Entry regulations and labour market outcomes: Evidence from the Italian retail trade sector," Labour Economics, Elsevier, vol. 15(6), pages 1200-1222, December.
    5. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2008. "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, Elsevier, vol. 63(2), pages 405-430, March.
    6. Marianne Bertrand & Francis Kramarz, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1369-1413.
    7. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    8. Fabiano Schivardi & Eliana Viviano, 2011. "Entry Barriers in Retail Trade," Economic Journal, Royal Economic Society, vol. 121(551), pages 145-170, March.
    9. Javier Miranda & Shawn Klimek & Ron Jarmin, 2004. "Firm Entry and Exit in the U.S. Retail Sector, 1977-1997," Working Papers 04-17, Center for Economic Studies, U.S. Census Bureau.
    10. David Flath, 2003. "Regulation, Distribution Efficiency, and Retail Density," NBER Working Papers 9450, National Bureau of Economic Research, Inc.
    11. Martens, Bobby J. & Dooley, Frank J. & Kim, Sounghun, 2006. "The Effect Of Entry By Wal-Mart Supercenters On Retail Grocery Concentration," 2006 Annual meeting, July 23-26, Long Beach, CA 21101, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Supermarket; small grocery; entry; Uruguay;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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