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Mom-and-Pop Meet Big-Box: Complements or Substitutes?

Author

Listed:
  • John Haltiwanger
  • Ron Jarmin
  • C.J. Krizan

Abstract

In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes’ impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores – but only when the Big-Box activity is both in the immediate area and in the same detailed industry.

Suggested Citation

  • John Haltiwanger & Ron Jarmin & C.J. Krizan, 2009. "Mom-and-Pop Meet Big-Box: Complements or Substitutes?," Working Papers 09-34, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:09-34
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    File URL: https://www2.census.gov/ces/wp/2009/CES-WP-09-34.pdf
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    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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