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Deregulation in Retailing: The Dutch Experience

Author

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  • Martin Carree

    (Erasmus University Rotterdam and Maastricht University)

  • Joyce Nijkamp

    (Erasmus University Rotterdam)

Abstract

Institutional barriers to entry were removed to a considerable extent in 1996 in the Dutch retail sector. Three years before that the regulator decided to not take legal actions anymore against entrants violating institutional requirements. In the current analysis we investigate the effects of the deregulation during that 1993-1995 period using a recently developed model by Carree and Thurik (1999). The results show that the equilibrium number of firms has increased significantly. Results on the adjustment speed from the disequilibrium number of firms to the equilibrium number are more weak but tend to show a picture of increased speed. The deregulation of the Dutch retail industry seems therefore to have enlarged market dynamics (faster displacement and replacement) and to have reversed the concentration process to some extent. The results also show that the increase in the speed of adjustment is the consequence of lowering barriers to entry while the barriers to exit have not changed.

Suggested Citation

  • Martin Carree & Joyce Nijkamp, 1999. "Deregulation in Retailing: The Dutch Experience," Tinbergen Institute Discussion Papers 99-081/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:19990081
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    References listed on IDEAS

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    1. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    2. Winston, Clifford, 1993. "Economic Deregulation: Days of Reckoning for Microeconomists," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1263-1289, September.
    3. Carree, M. A. & Thurik, A. R., 1999. "The carrying capacity and entry and exit flows in retailing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 985-1007, October.
    4. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
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    Cited by:

    1. Roy Thurik & Sander Wennekers & Ingrid Verheul & David Audretsch, 2001. "An eclectic theory of entrepreneurship: policies, institutions and culture," Scales Research Reports H200012, EIM Business and Policy Research.
    2. Andrew Eckert & Douglas West, 2008. "Firm Survival and Chain Growth in a Privatized Retail Liquor Store Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(1), pages 1-18, February.
    3. Wennekers, Sander & van Stel, André & Carree, Martin & Thurik, Roy, 2010. "The Relationship between Entrepreneurship and Economic Development: Is It U-Shaped?," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 6(3), pages 167-237, July.
    4. Peter Mayerhofer & Peter Huber & Dieter Pennerstorfer, 2017. "Handel und Einzelhandel im Wiener Beschäftigungssystem. Arbeitsmarktrelevanz, Arbeitsplatzcharakteristika, absehbare Herausforderungen," WIFO Studies, WIFO, number 61951, Juni.
    5. Justo de Jorge & Cristina Suarez, 2007. "Efficiency Measures For Spanish Retailing Firms In A Regulated Market," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 32(1), pages 35-47, June.
    6. Martin Carree & Ingrid Verheul, 2012. "What Makes Entrepreneurs Happy? Determinants of Satisfaction Among Founders," Journal of Happiness Studies, Springer, vol. 13(2), pages 371-387, April.
    7. Verheul, I. & Carree, M.A., 2008. "Overoptimism among Founders: The Role of Information and Motivation," ERIM Report Series Research in Management ERS-2008-008-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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    More about this item

    Keywords

    Deregulation; Entry Barrier; Retailing;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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