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Paper No' CEPDP1636: | Full paper
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Keywords: retail shocks, city structure, small stores, commercial activity
JEL Classification: D2; J22; L81; R1
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
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Abstract:This paper evaluates the consequences of opening out-of-town big-boxes on the commercial structure of cities. I use a discontinuity in a commercial regulation in Spain that restricts the entry of big-box stores in municipalities of less than 10,000 inhabitants for the period 2003 to 2011. I then use this discontinuity as an instrument for the big-box opening. The results show that three years after the big-box opening, around 15% of the grocery stores in the municipality have disappeared. However, some of the empty commercial premises are taken by other new small retailers in other sectors. As a result, the total number of retail stores in the municipality remains unchanged. These results show that a retail shock in the suburbs does not necessarily empty the city center but can also change only the composition of its commercial activity.
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