Entry Barriers in Retail Trade

Fabiano Schivardi and Eliana Viviano

No 6637, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The 1998 reform of the Italy's 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 firms' performance for a representative sample of retailers. 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 substantially lower productivity of incumbent firms. Liberalizing entry has a positive effect on investment in ICT. Consistently, more stringent entry regulation results in higher inflation: lower productivity coupled with larger margins results in higher consumer prices.

Keywords: Entry barriers; Productivity growth; Technology (search for similar items in EconPapers)
JEL-codes: L11 L5 L81 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-com, nep-eff, nep-ent, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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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 (2009)
Working Paper: Entry Barriers in Retail Trade (2008)
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