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Erschienen in: The Annals of Regional Science 1/2022

07.02.2022 | Original Paper

How does big-box retail entry affect labor productivity in durable goods retailing? A synthetic control approach

verfasst von: Niklas Rudholm, Yujiao Li, Kenneth Carling

Erschienen in: The Annals of Regional Science | Ausgabe 1/2022

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Abstract

Using data from 2001 to 2012, the effects of IKEA entry in four Swedish municipalities, 2004–2007, on labor productivity in durable goods retailing is investigated using synthetic control methods. We contribute to the literature on synthetic control methods by considering parametric specifications of the intervention effect, which improves the likelihood of identifying the effect of IKEA entry on labor productivity. Our results indicate that in three out of four entry municipalities, labor productivity increased more than in their synthetic counterparts after IKEA entry, and that larger positive effects are found in rural municipalities where the new IKEA was large relative to the existing durable goods retail market.

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Fußnoten
1
Since we suggest new methods for statistical inference when using the SCM, we have also made a web-app where the SCM, including the methods for inference suggested in this paper, is readily available for any researcher that wants to employ these methods. For the purpose of replication, the dataset used in this paper is uploaded as the default in the app. By following the instructions in the manual for the app, the results for Haparanda are replicated, and the app can also be used to test the sensitivity of our results by making changes to the baseline model. The web-app can be accessed through https://​wishes.​shinyapps.​io/​intervention_​effect_​study/​.
 
2
This might seem like a large increase, but for the average Swedish municipality 17% equals about 250 new jobs in durable goods retailing, which is about the number that a new IKEA store usually employs.
 
3
As mentioned in the introduction, Daunfeldt et al. (2017) and Han et al. (2018) have shown that the impact of IKEA entry in Sweden is limited to the entry municipalities themselves, and as such we do not directly exclude adjacent municipalities from the donor pool. There are two municipalities used in the creation of the synthetic controls that are adjacent to any of the entry municipalities, Kungsbacka (adjacent to Gothenburg, used in the synthetic control for the entry in Karlstad in 2007) and Storfors (adjacent to Karlstad, used in the synthetic control for the entry in Gothenburg in 2004). However, in both cases the weight of these municipalities in the contribution to the synthetic control unit is below 0.1, and as such they will only have a minor impact on the synthetic control unit created.
 
4
Although the use of municipality level data makes it impossible to directly identify if an increase in labor productivity arises as direct or indirect effects (cf Sect. 3), we discuss further our results in conjunction to previous studies in Sect. 6, along with some suggestions for future research that would be possible subject to access to firm level data.
 
5
Such firm level data can for example be found in the Serrano database. See the Swedish House of Finance, https://​support.​data.​houseoffinance.​se for more information.
 
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Metadaten
Titel
How does big-box retail entry affect labor productivity in durable goods retailing? A synthetic control approach
verfasst von
Niklas Rudholm
Yujiao Li
Kenneth Carling
Publikationsdatum
07.02.2022
Verlag
Springer Berlin Heidelberg
Erschienen in
The Annals of Regional Science / Ausgabe 1/2022
Print ISSN: 0570-1864
Elektronische ISSN: 1432-0592
DOI
https://doi.org/10.1007/s00168-022-01110-4

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