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Do Large Retailers Affect Employment? Evidence from an Emerging Economy

Author

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  • Rosario Rivero
  • Rodrigo Vergara

    () (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Abstract

This paper studies the effect of the emergence of large retailers (hypermarkets and department stores) on employment in the commerce sector in the regions of Chile. We use a panel with quarterly data from eleven Chilean regions for the period 1996-2004. Our results indicate that the entry of large retailers produces a discrete increase in employment in the commerce sector in the quarter that the entry occurs. We also find that there is an additional positive effect on employment throughout the year entry occurs, suggesting that suppliers or other parts of the chain of production follow the large retailer into the local market. However, after the first year of the entry there is a partial reversion, suggesting that smaller retailers exit or contract in response to the entry of the large retailer. The net effect on employment of the entry of a large retailer is an increase of 300 jobs.

Suggested Citation

  • Rosario Rivero & Rodrigo Vergara, 2006. "Do Large Retailers Affect Employment? Evidence from an Emerging Economy," Documentos de Trabajo 307, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:307
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    File URL: http://www.economia.uc.cl/docs/dt_307.pdf
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    References listed on IDEAS

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    1. 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.
    2. Basker, Emek, 2005. "Selling a cheaper mousetrap: Wal-Mart's effect on retail prices," Journal of Urban Economics, Elsevier, vol. 58(2), pages 203-229, September.
    3. Loreto Lira & Rosario Rivero & Rodrigo Vergara, 2005. "Entry and Prices: Evidence from the Chilean Supermarket Industry," Documentos de Trabajo 299, Instituto de Economia. Pontificia Universidad Católica de Chile..
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    Cited by:

    1. Loreto Lira & Rosario Rivero & Rodrigo Vergara, 2007. "Entry and Prices: Evidence from the Supermarket Sector," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(4), pages 237-260, December.

    More about this item

    Keywords

    Entry; employment; retail;

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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