Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Wednesday, June 11, 2008

Entry Barriers in Retail Trade

Posted by D. Daniel Sokol

Fabiano Schivardi, Universita di Cagliari - Department of Economics and Eliana Viviano, Bank of Italy - Economic Research provide some research on Entry Barriers in Retail Trade.

ABSTRACT:  The 1998 reform of the Italy's retail trade sector delegated the regulation of entry of large stores to the regional governments. We use the local variation in regulation to determine the effects of entry barriers on firms' performance for a representative sample of retailers. We address the endogeneity of entry barriers through local fixed effects and using political variables as instruments. We also control for differences in trends and for area-wide shocks. We find that entry barriers are associated with substantially larger profit margins and substantially lower productivity of incumbent firms. Liberalizing entry has a positive effect on investment in ICT. Consistently, more stringent entry regulation results in higher inflation: lower productivity coupled with larger margins results in higher consumer prices.

http://lawprofessors.typepad.com/antitrustprof_blog/2008/06/entry-barriers.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef00e55345396d8833

Listed below are links to weblogs that reference Entry Barriers in Retail Trade:

Comments

Post a comment