Has Wal-Mart Buried Mom and Pop?: The Impact of Wal-Mart on Self Employment and Small Establishments in the United States

Russell Sobel and Andrea Dean
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Russell Sobel: Department of Economics, West Virginia University
Andrea Dean: Department of Economics and Entrepreneurship Center, West Virginia University

No 06-05, Working Papers from Department of Economics, West Virginia University

Abstract: Saving traditional small ‘mom and pop’ businesses has been a justification for political and court decisions preventing Wal-Mart from opening new stores virtually everywhere across the United States. We present the first rigorous econometric investigation of how Wal-Mart actually impacts the small business sector. We examine the rate of self-employment and the number of smallemployer establishments using both time-series and cross-sectional data. Contrary to popular belief, our results suggest that the process of creative destruction unleashed by Wal-Mart has had no statistically significant long-run impact on the overall size and profitability of the small business sector in the United States.

JEL-codes: L81 D59 C21 (search for similar items in EconPapers)
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Date: Written
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