 Does Restricting the Entry of Formula Businesses Help Mom-and-Pop Stores? The Case of Small American Towns With Unique Community CharacterMinjee Kim and Tingyu Zhou Economic Development Quarterly, 2021, vol. 35, issue 2, 157-173 Abstract: Communities worldwide are increasingly introducing regulatory measures to protect independent businesses from chain stores, but the efficacy of these attempts is largely debated. Moreover, effects are likely to vary by the characteristics of the local economy, a consideration overlooked by existing studies. Using a sample of U.S. cities with unique community characteristics, the authors examine Formula Business Restrictions (FBR), a type of an American land use regulation that restricts the entry of “formula businesses.†The authors find that the passage of FBR led to a higher number and percentage of employees working in mom-and-pop businesses, which was primarily achieved by protecting existing ones from downsizing. This positive effect occurred over time with increasing magnitude. The authors also find heterogeneous effects on different sectors: FBR had strong positive effects on the retail sector, but not on the service sector. Findings suggest that chain store entry barriers can be beneficial for mom-and-pop businesses when designed carefully. Keywords: land use regulation; local economic development; chain stores; entry barriers; mom-and-pop businesses (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:35:y:2021:i:2:p:157-173 DOI: 10.1177/08912424211002913 Access Statistics for this article More articles in Economic Development Quarterly |
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