Regulation and UK Retailing Productivity: Evidence from Micro Data

Jonathan Haskel () and Raffaella Sadun

No 4028, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use UK micro data to explore whether planning regulation reduced UK retailing productivity growth between 1997 and 2003. We document a shift to smaller shops, particularly within supermarket chains, following a regulatory change in 1996 which increased the costs of opening large stores. This might have caused a slowdown in productivity growth if firms (a) lose scale advantages, by moving to smaller stores and (b) lose scope advantages if existing organisational knowledge appropriate to larger stores is not perfectly substitutable with the organisational capital required to run smaller stores. Our micro data shows a relation, controlling for fixed effects, between chain-level TFP for multi-store chains and various measures of the size of the stores within the chain. Our results suggest the fall in within-chain shop sizes was associated with a lowering of chain TFP by about 0.4% pa, about 40% of the post-1995 slowdown in UK retail TFP growth. The foregone productivity works out at about £80,000 per small chain supermarket store.

Keywords: retail; productivity; regulation (search for similar items in EconPapers)
JEL-codes: D24 L81 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2009-02
New Economics Papers: this item is included in nep-eff and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published - published in: Economica, 2012, 79 (315), 425-448

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Related works:
Journal Article: Regulation and UK Retailing Productivity: Evidence from Microdata (2012)
Working Paper: Regulation and UK Retailing Productivity: Evidence from Micro Data (2009)
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