The Effect of Large-Scale Retailers on Price Level: Evidence from Japanese data for 1977-1992

Katsumi Shimotsu

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Since its enactment in 1974 until its easing in the 1990s, the Large-Scale Retail Store Law ( Daikibo Kouri Tenpo Ho ) strictly regulated the entry of large-scale retailers in cities in Japan to protect local small and medium incumbent stores. This paper investigates the effect of large-scale retailers on the price level in Japan using city-level panel data from 1977 to 1992, the period when the Large-Scale Retail Store Law exercised strong entry restrictions. Using fixed effects estimation and instrumental variable estimation, we find that the presence of large-scale retailers, measured by their floor area relative to that of all of the retailers, has a negative effect on the price index of agricultural products, mass-produced food products, textiles, and durable goods. The estimation results suggest that a 10% increase in the relative floor area of large-scale retailers reduces the price level by around 0.3%-1.3%.

Pages: 23 pages
Date: 2014-03
New Economics Papers: this item is included in nep-agr, nep-com and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:14013

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