Entry Barriers in Retail Trade

Fabiano Schivardi and Eliana Viviano

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: The 1998 reform of the Italian retail trade sector delegated the regulation of entry of large stores to the regional governments. We use the local variation in regulation to determine the effects of entry barriers on sectoral performance. We address the endogeneity of entry barriers through local fixed effects and using political variables as instruments. We also control for differences in trends and for area-wide shocks. We find that entry barriers are associated with substantially larger profit margins and lower productivity of incumbent firms. Liberalizing entry has a positive effect on investment in ICT, increases employment and compresses labor costs in large shops. In areas with more stringent entry regulation, lower productivity coupled with larger margins results in higher consumer prices.

Keywords: entry barriers; productivity growth; retail trade (search for similar items in EconPapers)
JEL-codes: L11 L5 L81 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-com, nep-eff, nep-ent, nep-ind, nep-reg and nep-ure
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Related works:
Journal Article: Entry Barriers in Retail Trade (2011)
Working Paper: Entry Barriers in Retail Trade (2010)
Working Paper: Entry Barriers in Retail Trade (2008)
Working Paper: Entry Barriers in Retail Trade (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:200908

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