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Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing

Entry of large ("big-box") stores along with a drastic fall in the number of stores are striking trends in retail. We use a dynamic model to measure the impact of large entrants on productivity, allowing for a controlled productivity process and accounting for prices, local markets, and the endogeneity of entry. Using data on all retail food stores in Sweden, we find that incumbents' productivity increase after large entry and that the magnitude of the increase declines with the productivity of incumbents. Our findings highlight that large entrants play a crucial role in driving productivity growth.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 898.

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Length: 72 pages
Date of creation: 18 Jan 2012
Date of revision: 11 Dec 2014
Handle: RePEc:hhs:iuiwop:0898
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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