The “Wal-Mart effect” in central and eastern Europe

Deniz Igan and Junichi Suzuki

Journal of Comparative Economics, 2012, vol. 40, issue 2, 194-210

Abstract: Prior to the recent global financial crisis altering the price dynamics, inflation in central and eastern European countries was characterized by a sharp drop pattern. Several factors contributed to this decline such as benign global economic conditions and growing credibility of domestic macroeconomic policies, yet factors related to industrial organization and market competition have been somewhat overlooked. Using measures of retail competition intensity reflecting the prevalence of high-productivity, modern-format retailers, we find that the decline in retail goods price inflation, and particularly food price inflation, was associated with increased retail competition. This may be linked to improved living conditions as households allocate more to health and education.

Keywords: Wal-Mart effect; Retail competition; Inflation (search for similar items in EconPapers)
JEL-codes: E31 L16 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:40:y:2012:i:2:p:194-210

DOI: 10.1016/j.jce.2011.08.003

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