Does Organizational Form Drive Competition? Evidence from Coffee Retailing

Brian Adams, Joshua Gans, Richard Hayes and Ryan Lampe

No 22548, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This article examines patterns of entry and exit in a relatively homogeneous product market to investigate the impact of entry on incumbent firms and market structure. In particular, we are interested in whether the organizational form of entrants matters for the competitive decisions of incumbents. We assess the impact of chain stores on independent retailers in the Melbourne coffee market using annual data on the location and entry status of 4,768 coffee retailers between 1991 and 2010. The long panel enables us to include market fixed effects to address the endogeneity of store locations. Logit regressions indicate that chain stores have no discernible effect on the exit or entry decisions of independent stores. However, each additional chain store increases the probability of another chain store exiting by 2.5 percentage points, and each additional independent cafe increases the probability of another independent cafe exiting by 0.5 percent. These findings imply that neighboring independents and chains operate almost as though they are in separate markets. We offer additional analysis suggesting consumer information as a cause of this differentiation.

JEL-codes: L11 L15 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-com and nep-ind
Note: IO PR
References: Add references at CitEc
Citations:

Published as Brian Adams & Joshua Gans & Richard Hayes & Ryan Lampe, 2018. "Does Organisational Form Drive Competition? Evidence from Coffee Retailing," The Economic Record, The Economic Society of Australia, vol. 94(305), pages 155-167, June.

Downloads: (external link)
http://www.nber.org/papers/w22548.pdf (application/pdf)

Related works:
Journal Article: Does Organisational Form Drive Competition? Evidence from Coffee Retailing (2018)
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:nbr:nberwo:22548

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22548

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().