How does big-box retail entry affect incumbents in the hospitality industry: Evidence from a natural experiment

Oana Mihaescu () and Niklas Rudholm
Additional contact information
Niklas Rudholm: HUI Research, Postal: 103 29 Stockholm, Sweden,

No 134, HUI Working Papers from HUI Research

Abstract: This paper empirically measures the effects of big-box retail entry on the productivity of incumbent firms within the hospitality sector in the entry regions and investigates whether the effects differ depending on the size of the local market before entry. We use the entry of IKEA in four Swedish municipalities as a natural experiment to study how it affects productivity in incumbent firms within the hospitality sector. Our results show that entry by IKEA has a negative impact on the productivity of incumbents in Haparanda, Kalmar, and Karlstad, but no statistically significant effects in the metropolitan region of Gothenburg. As the majority of firms in the hospitality sector are restaurants, we expect that our results are due to increased competition within this part of the hospitality sector since all new IKEA stores come with a large, popular, and reasonably-priced restaurant.

Keywords: Big-box entry; agglomeration; production function; hospitality sector (search for similar items in EconPapers)
JEL-codes: D22 L11 L25 L83 P25 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2018-05-07
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:huiwps:0134

Access Statistics for this paper

More papers in HUI Working Papers from HUI Research Handelns Forskningsinstitut, c/o HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Hans Seerar Westerberg ().