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Li, Y., Håkansson, J., Mihaescu, O. & Rudholm, N. (2019). Agglomeration economies in urban retailing: Are there productivity spillovers when big-box retailers enter urban markets?. Applied Economics Letters
Open this publication in new window or tab >>Agglomeration economies in urban retailing: Are there productivity spillovers when big-box retailers enter urban markets?
2019 (English)In: Applied Economics Letters, ISSN 1350-4851, E-ISSN 1466-4291Article in journal (Other academic) In press
Abstract [en]

Previous studies have found that big-box retail entry does not affect the productivity of incumbent retailers when entry occurs in urban areas. In this paper, we show that there are positive spillover effects of big-box retail entry to incumbent retailers in urban areas as well, but that these are limited to relatively small retailers, making the effects difficult to detect using traditional econometric methods, such as difference-in-difference estimation on the full sample of firms. In a two-step procedure, we first use panel smooth transition regression to determine size thresholds that delimit incumbent retail firms by their possible reactions to the new big-box entry. We then use difference-in-difference estimations on these subgroups of firms to determine, within each group, the direction and magnitude of the effects of big-box entry on their productivity. For the group of small incumbent retailers, we find positive spillover effects on productivity of approximately 9%.

Keywords
Productivity growth; Cobb-Douglas production function; IKEA; panel smooth transition regression; regression tree analysis.
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-27882 (URN)10.1080/13504851.2019.1588939 (DOI)000461969800001 ()2-s2.0-85063161158 (Scopus ID)
Funder
Swedish Retail and Wholesale Development Council, 2015:4
Available from: 2018-06-14 Created: 2018-06-14 Last updated: 2019-04-04Bibliographically approved
Håkansson, J., Li, Y., Mihaescu, O. & Rudholm, N. (2019). Big-box retail entry in urban and rural areas: Are there productivity spillovers to incumbent retailers?. International Review of Retail Distribution & Consumer Research, 29(1), 23-45
Open this publication in new window or tab >>Big-box retail entry in urban and rural areas: Are there productivity spillovers to incumbent retailers?
2019 (English)In: International Review of Retail Distribution & Consumer Research, ISSN 0959-3969, E-ISSN 1466-4402, Vol. 29, no 1, p. 23-45Article in journal (Refereed) Published
Abstract [en]

This paper empirically measures the potential spillover effects of big-box retail entry on the productivity of incumbent retailers in the entry regions, and investigates whether the effects differ depending on the size of the new establishment relative to the size of the local market. The results indicate that big-box entry increases the productivity of incumbent firms in two of three rural entry regions where the IKEA is large relative to the local retail market, while no productivity spillover effects could be found in the case of the urban IKEA entry in Gothenburg.

Keywords
Big-box entry, IKEA, agglomeration, Retail productivity, Retail entry subsidies
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-27887 (URN)10.1080/09593969.2018.1562956 (DOI)2-s2.0-85060352043 (Scopus ID)
Funder
Swedish Retail and Wholesale Development Council, 2015:4
Available from: 2018-06-14 Created: 2018-06-14 Last updated: 2019-03-05Bibliographically approved
Han, M., Mihaescu, O., Li, Y. & Rudholm, N. (2018). Comparison and one-stop shopping after big-box retail entry: a spatial difference-in-difference analysis. Journal of Retailing and Consumer Services, 40, 175-187
Open this publication in new window or tab >>Comparison and one-stop shopping after big-box retail entry: a spatial difference-in-difference analysis
2018 (English)In: Journal of Retailing and Consumer Services, ISSN 0969-6989, E-ISSN 1873-1384, Vol. 40, p. 175-187Article in journal (Refereed) Published
Abstract [en]

This paper empirically measures the potential spillover effects of big-box retail entry on the productivity of incumbent retailers in the entry regions, and investigates whether the effects differ depending on 1) if the entry is in a rural or urban area, and 2) if the incumbent retailers are within retail industries selling substitute or complement goods to those found in IKEA. To identify the IKEA-entry effect, a difference-in-difference model is suitable, but traditionally such estimators neglect the possibility that firms’ sales are determined by a process with spatially interactive responses. If ignored, these responses may cause biased estimates of the IKEA entry effect due to spatial heterogeneity of the treatment effect. One objective of this paper is thus to propose a spatial difference-in-difference estimator accounting for possible spatial spillover effects of IKEA entry. Particular emphasis is placed on the development of a suitable weight matrix accounting for the spatial links between firms, where we allow for local spatial interactions such that the outcome of observed units depends both on their own treatment as well as on the treatment of their neighbors. Our results show that for complementary goods retailers (or one-stop shopping retailers) in Haparanda and Kalmar, productivity increased by 35% and 18%, respectively, due to IKEA entry. No statistically significant effects were found for the entries in Karlstad and Gothenburg, indicating that it is mainly incumbents in smaller entry regions that benefit from IKEA entry. Also, for incumbent retailers selling substitute (or comparison shopping) goods no significant effects were found in any of the entry regions, indicating that it is mainly retailers selling complementary goods that benefit from IKEA entry. Finally, our results also show that ignoring the possibility of spatially correlated treatment effects in the regression models reduces the estimated impact of the IKEA entries in Haparanda and Kalmar on productivity in one-stop shopping retail firms with 3% and 0.1% points, respectively. © 2017 Elsevier Ltd

Keywords
Big-box entry, Production functions, Retail entry subsidies, Retail productivity, Spatial difference-in-difference
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-26630 (URN)10.1016/j.jretconser.2017.10.003 (DOI)2-s2.0-85033554892 (Scopus ID)
Available from: 2017-11-29 Created: 2017-11-29 Last updated: 2019-08-26Bibliographically approved
Mihaescu, O. & Rudholm, N. (2017). Defining relevant markets for pharmacuticals. Bulletin of Economic Research, 69(4), E126-E149
Open this publication in new window or tab >>Defining relevant markets for pharmacuticals
2017 (English)In: Bulletin of Economic Research, ISSN 0307-3378, E-ISSN 1467-8586, Vol. 69, no 4, p. E126-E149Article in journal (Refereed) Published
Abstract [en]

To identify the relevant product markets for Swedish pharmaceuticals, a spatial econometrics approach is employed. First, we calculate Moran’s Is for different market definitions and then we use a spatial Durbin model to determine the effect of price changes on quantity sold of own and competing products. As expected, the results show that competition is strongest between close substitutes; however, the relevant product markets for Swedish pharmaceuticals extend beyond close substitutes down to products included in the same class on the four-digit level of the Anatomic Therapeutic Chemical system as defined by the World Health Organization. The spatial regression model further indicates that increases in the price of a product significantly lower quantity sold of that product and in the same time increase the quantity sold of competing products. For close substitutes (products belonging to the same class on the seven-digit level of the Anatomic Therapeutic Chemical system), as well as for products that, without being close substitutes, belong to the same therapeutic/pharmacological/chemical subgroup (the same class on the five-digit level of the Anatomic Therapeutic Chemical system), increased competition is also visible after 1 July 2009 when the latest policy changes with regards to pharmaceuticals have been implemented in Sweden.

Keywords
competition; horizontal merger guidelines; market delineation; market reform; spatial Durbin model
National Category
Economics
Research subject
Complex Systems – Microdata Analysis, General Microdata Analysis - retail
Identifiers
urn:nbn:se:du-23605 (URN)10.1111/boer.12106 (DOI)000412524800008 ()
Available from: 2016-12-17 Created: 2016-12-17 Last updated: 2017-10-27Bibliographically approved
Daunfeldt, S.-O., Mihaescu, O., Nilsson, H. & Rudholm, N. (2017). What happens when IKEA comes to town?. Regional studies, 51(2), 313-323
Open this publication in new window or tab >>What happens when IKEA comes to town?
2017 (English)In: Regional studies, ISSN 0034-3404, E-ISSN 1360-0591, Vol. 51, no 2, p. 313-323Article in journal (Refereed) Published
Abstract [en]

The effects of a new IKEA store on retail revenues, employment and inflow of purchasing power in the entry municipalities as well as in neighbouring municipalities were investigated using data from 2000–11. A propensity score-matching method was used to find non-IKEA entry municipalities that were as similar as possible to the entry municipalities based on the situation before entry. The results indicate that IKEA entry increased entry municipality durable goods revenues by about 20% and employment by about 17%. Only small and, in most cases, statistically insignificant effects were found in neighbouring municipalities.

National Category
Economic Geography
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-20390 (URN)10.1080/00343404.2015.1100287 (DOI)000395130100011 ()
Available from: 2015-12-10 Created: 2015-12-10 Last updated: 2018-03-27Bibliographically approved
Daunfeldt, S.-O., Halvarsson, D. & Mihaescu, O. (2016). High-growth firms: Not so vital after all?. International Review of Entrepreneurship, 14(4)
Open this publication in new window or tab >>High-growth firms: Not so vital after all?
2016 (English)In: International Review of Entrepreneurship, ISSN 2009-2822, Vol. 14, no 4Article in journal (Refereed) Published
Place, publisher, year, edition, pages
Senate Hall, 2016
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-24068 (URN)
Available from: 2017-02-03 Created: 2017-02-03 Last updated: 2017-02-16Bibliographically approved
Hortlund, P. & Mihaescu, O. (2016). The impact of price changes on volume sales of alcoholic beverages in Sweden, 2006-2013.
Open this publication in new window or tab >>The impact of price changes on volume sales of alcoholic beverages in Sweden, 2006-2013
2016 (English)Report (Other academic)
Series
HUI Working Papers, HUI Research ; 115
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-24071 (URN)
Available from: 2017-02-03 Created: 2017-02-03 Last updated: 2017-02-06Bibliographically approved
Daunfeldt, S.-O., Halvarsson, D. & Mihaescu, O. (2015). High-growth firms: Not so vital after all?.
Open this publication in new window or tab >>High-growth firms: Not so vital after all?
2015 (English)Report (Other academic)
Abstract [en]

High-growth firms have received considerable interest recently since they create most of the new jobs in the economy. The purpose of our paper is to investigate the characteristics of high-growth firms prior to their growth period, and whether these characteristics differ across industries. Using data on a large sample of limited liability firms in Sweden for the period 2007-2010, we find that high-growth firms do not have the characteristics that we typically associate with successful firms. On the contrary, our results indicate that high-growth firms have low profits and a weak financial position. This might explain why studies have found that high-growth firms are seldom capable of sustaining their high growth rates in subsequent periods, and thus question policies that are targeted towards these companies.

Series
HUI Working Papers, HUI Research ; 114
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-20391 (URN)
Available from: 2015-12-10 Created: 2015-12-10 Last updated: 2017-02-06Bibliographically approved
Organisations
Identifiers
ORCID iD: ORCID iD iconorcid.org/0000-0003-3362-5755

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