Entry regulations with implementation lag: Evidence from convenience store markets in Korea

Seongmin Seo and Sang Soo Park

International Journal of Industrial Organization, 2024, vol. 93, issue C

Abstract: Seocho County in Korea attempted to advance the interests of incumbent businesses by weakening competition in the convenience store market. To this end, it created a regulation impeding the opening of new convenience stores. Although this regulation intensified proximity restrictions between stores, our findings reveal that the announcement of legislation condemned incumbent businesses to unfavorable survival probabilities. We provided supporting evidence that so-called implementation lags—time lags between the announcement and implementation of policies—and adaptive behaviors of potential store owners may have caused unintended consequences. Our findings imply that policymakers should consider implementation lag and the adaptive behaviors of economic agents.

Keywords: Entry regulation; Implementation lag; Unintended consequence; Convenience store; Regression discontinuity design (search for similar items in EconPapers)
JEL-codes: D22 L40 L81 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:93:y:2024:i:c:s0167718724000122

DOI: 10.1016/j.ijindorg.2024.103057

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