The entry of online retailers and productivity dynamics in the retail trade sector

Hyunabe Chun and Donghan Shin

Economics Letters, 2023, vol. 222, issue C

Abstract: We examine the labor productivity dynamics of online retailers using census business data combined with mail-order business licenses. Online retailers primarily contribute to retail sector productivity through post-entry productivity growth, whereas brick-and-mortar stores contribute by replacing less productive stores with more productive entrants. The low productivity of online entrants due to low entry costs negatively affects the industry’s productivity. Our findings suggest that the large-scale entry of online retailers could change productivity dynamics in the retail trade sector.

Keywords: E-commerce; Entry and exit; Productivity; Retail trade sector (search for similar items in EconPapers)
JEL-codes: L81 O47 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004311

DOI: 10.1016/j.econlet.2022.110957

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