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The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia

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  • Michael J. Hicks

    (Air Force Institute of Technology)

  • Kristy Wilburn

    (Marshall University)

Abstract

This paper examines the retail trade sector in 14 West Virginia counties from 1989 through 1996. A series of random effects models are tested on these panel data to measure the effect of the entrance of Wal- Mart stores in the county and in adjacent counties, and business cycle effects. This paper differs from earlier research in that it controls for endogeneity in the entrance decision of Wal-Mart in faster growing counties. This research finds a dramatic net increase in employment and wages in the Retail Trade sector (SIC 52) and a mild increase in the number of firms. The study finds a per capita wage increase in this industry, which is surprising but small. The paper concludes with further research recommendations.

Suggested Citation

  • Michael J. Hicks & Kristy Wilburn, 2005. "The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," Urban/Regional 0511011, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0511011
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    References listed on IDEAS

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    1. Stone, Kenneth E. & Deller, Steven C. & McConnon, James C. Jr., 1992. "The New Retail Environment in Maine," Staff General Research Papers Archive 11255, Iowa State University, Department of Economics.
    2. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-641, June.
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    Cited by:

    1. 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.
    2. Michael J. Hicks, 2006. "Transportation and infrastructure, retail clustering, and local public finance: evidence from Wal-Mart's expansion," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 100-114.
    3. Michael Hicks, 2007. "Wal-Mart’s Impact on Local Revenue and Expenditure Instruments in Ohio, 1988–2003," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(1), pages 77-95, March.
    4. whitney Oliver Peake & Maria I. Marshall, 2006. "What Do We Really Know About Entrepreneurs? An Analysis Of Nascent Entrepreneurs In Indiana," Working Papers 06-14, Purdue University, College of Agriculture, Department of Agricultural Economics.
    5. Vandegrift, Donald & Loyer, John & Kababik, David, 2011. "The effect of Walmart on the tax base: evidence from New Jersey," MPRA Paper 30937, University Library of Munich, Germany.
    6. Goetz, Stephan J. & Swaminathan, Hema, 2004. "Wal-Mart and Rural Poverty," 2004 Annual meeting, August 1-4, Denver, CO 20149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Suzanne Konzelmann & Charles Craypo & Rabih Aridi & Frank Wilkinson, 2005. "The national varieties of capitalism: the cases of Wal-mart and Ikea," Working Papers wp314, Centre for Business Research, University of Cambridge.
    8. Martens, Bobby J. & Florax, Raymond J.G.M. & Dooley, Frank J., 2005. "The Effect of Entry by Supercenter and Warehouse Club Retailers on Grocery Sales and Small Supermarkets: A Spatial Analysis," 2005 Annual meeting, July 24-27, Providence, RI 19176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Michael J. Hicks, 2005. "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?," Public Economics 0511015, EconWPA.
    10. Dube, Arindrajit & Lester, T. William & Eidlin, Barry, 2007. "Firm Entry and Wages: Impact of Wal-Mart Growth on Earnings Throughout the Retail Sector," Institute for Research on Labor and Employment, Working Paper Series qt22s5k4pv, Institute of Industrial Relations, UC Berkeley.
    11. Michael J. Hicks, 2005. "The Impact of Wal-Mart on Local Fiscal Health: Evidence from a Panel of Ohio Counties," Public Economics 0511016, EconWPA.
    12. Volpe, Richard J., III & Lavoie, Nathalie, 2005. "The Effect of Wal-Mart Supercenters on Grocery Prices in New England," 2005 Annual meeting, July 24-27, Providence, RI 19188, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Hicks, Michael J., 2007. "A Quasi-Experimental Test of Large Retail Store Impacts on Regional Labor Markets: The Case of Cabela's Retail Outlets," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(2).

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    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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