Entry Regulations and Product Variety in Retail

Matilda Orth () and Florin Maican
Additional contact information
Matilda Orth: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden, https://www.ifn.se/en/researchers/ifn-researcher/matilda-orth/

No 1386, Working Paper Series from Research Institute of Industrial Economics

Abstract: We study how changes in competition from entry regulations impact stores’ incentives to adjust product variety. Using Swedish data, we estimate a dynamic model of endogenous product offerings where stores utilize multiproduct technology to generate sales. The median long-run benefit of adding one more product category is 20 percent higher in restrictive than in liberal markets. Counterfactuals show that more liberal regulation spurs repositioning and increases variety, especially in rural markets, driven by a new mechanism of productivity gains and cost reductions. Strong liberalization enhances product entry in markets with restrictive regulation but less in rural markets with limited demand.

Keywords: Retail; Entry regulations; Competition dynamics; Variety; Productivity (search for similar items in EconPapers)
JEL-codes: L11 L13 L81 (search for similar items in EconPapers)
Pages: 89 pages
Date: 2021-04-01, Revised 2024-09-13
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
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Related works:
Working Paper: Entry Regulations and Product Variety in Retail (2021)
Working Paper: Entry Regulations and Product Variety in Retail (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1386

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