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Productivity Dynamics and the Role of ‘Big‐Box’ Entrants in Retailing
Author(s) -
Maican Florin,
Orth Matilda
Publication year - 2017
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/joie.12121
Subject(s) - productivity , endogeneity , distribution (mathematics) , industrial organization , economics , business , multifactor productivity , labour economics , total factor productivity , econometrics , macroeconomics , mathematical analysis , mathematics
We use a dynamic model to measure the impact of the entry of large stores on incumbents’ productivity separate from demand while accounting for local markets and the endogeneity of entry. Using data on all retail food stores in Sweden, we find that incumbents’ productivity increases after the entry of large stores and that the magnitude of the increase declines toward the upper part of the productivity distribution. Our findings highlight that large entrants drive productivity.