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Does Organisational Form Drive Competition? Evidence from Coffee Retailing
Author(s) -
Adams Brian,
Gans Joshua,
Hayes Richard,
Lampe Ryan
Publication year - 2018
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12397
Subject(s) - competition (biology) , business , logit , marketing , panel data , industrial organization , logistic regression , advertising , economics , econometrics , statistics , mathematics , ecology , biology
Independent and chain coffee shops offer similar products, but differ in their organisational form and branding. We examine the entry and exit patterns of 4,768 coffee retailers in Melbourne between 1991 and 2010. Panel logit regressions indicate that chain stores have no discernible effect on the exit or entry decisions of independent stores. However, chains and independents do increase the probability of exit for neighbouring stores of their own type. These findings imply that independents and chains operate almost as though they are in separate markets.