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Citations
... When studying the development of retail revenues in 13 towns in Maine, US, Davidson and Rummel (2000) found that total revenues increased by 41% in Wal-Mart entry towns versus 28% in towns into which Wal-Mart did not enter. Similarly, Artz and Stone (2012) found that total annual per capita retail revenues increased by 11% following the entry of Wal-Mart into towns in Iowa, US. Daunfeldt et al. (2017) investigated the regional effects of IKEA entry on a local market, finding that durable goods revenues increased by 20% in entry municipalities, compared with similar municipalities into which IKEA did not enter. However, in other cases, dissipation forces, such as competition, seem stronger than agglomeration forces, generating negative spillover. ...
... Davidson and Rummel (2000) found that total revenues increased by up to 41% in Wal-Mart towns, while neighbouring towns experienced decreases of approximately 1% during the first year after entry and then increases of approximately 2-10% in subsequent years. Daunfeldt et al. (2017) found that new IKEA stores increased durable-goods revenues in the entry municipalities by 20%, while the effects in neighbouring municipalities were small or not statistically significant. Hicks and Wilburn (2001) also examined the spatial impact of Wal-Mart and found strong, positive effects on retail employment and the number of retail firms in the entry regions and weak, although statistically significant, negative effects in neighbouring regions. ...
... Municipalities that had an IKEA store before our study period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010) are included as potential control municipalities because the entry of an IKEA store induces a change in the levels of the outcome variables, rather than a change in their trends (Daunfeldt et al., 2017). Furthermore, the last IKEA entry occurred more than ten years before our first entry, suggesting that the effects of previous entries resulted in new levels of retail sales and employment within these municipalities. ...
We investigate the effects of IKEA entry in three Swedish municipalities, finding that revenues for incumbent retailers located 1 km from the new IKEA store experienced a 7% increase in revenues due to positive spillover. The effect was insignificant for retailers located in city centers or more than 1km from IKEA. Moreover, the positive agglomeration effects only dominate the negative competition effects for stores that sell complementary products, while same-market retailers located between 2 and 5 km away from the new IKEA store experienced revenue loss due to IKEA entry. In contrast to retail revenues, the effects on employment were statistically insignificant.
... Previous studies indicate that when IKEA enters the market, incumbent retailers increase their use of labour 2017) and capital . Also, in Swedish retailing, small firms tend to grow faster than larger firms (Daunfeldt et al, 2012). ...
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-indifference 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-indifference 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%.
... Previous studies of the effects of big-box retail entry on surrounding businesses have mainly considered the impact on retail revenues or retail employment and have been based mainly on the entry of Wal-Mart stores in the USA, 2 although there are some exceptions. For example, Jones and Doucet (2000) and Hernandez (2003) studied the Canadian market and big-box entry in general, while Daunfeldt et al. (2015aDaunfeldt et al. ( , 2015b) investigated the impact of IKEA entry on revenues and employment in Swedish municipalities. ...
... The results of these studies are ambiguous, with some finding positive (Davidson and Rummel, 2000; Artz and Stone, 2012, Daunfeldt et al., 2015a, 2015b) and others negative (e.g., Merriman et al., 2012Jones and Doucet, 2000; Hicks, 2008; Neumark et al., 2008). Moreover, the literature on the possible effects of big-box entry on the productivity of incumbent retailers in the entry regions is scarce. ...
... In two studies of how entry by IKEA affects revenues and employment in the entry municipalities in Sweden (Daunfeldt et al., 2015aDaunfeldt et al., , 2015b), control municipalities were identified using logit estimations to detect municipalities where IKEA had not entered, but which had a similar probability of entry based on observables. However, as pointed out by Greenstone et al. (2010), such a strategy implies that the entry decision can be correctly modeled by the observable characteristics of the municipalities, while in most cases many important characteristics are generally unknown and unobserved by the researcher. ...
... A new Wal-Mart store could thus be more focused towards fulfilling demand in a closer proximity than a new IKEA store, suggesting that the regional effects of entry might differ. Daunfeldt et al. (2014) is the only previous study, as far as we know, that has investigated regional effects when IKEA enters a local market, finding that a new IKEA store increased durable-goods revenues by about 20%, and employment in durable goods trade by about 17%, in the entry municipalities. Only small negative effects were found in neighboring municipalities. ...
... However, the results are based on aggregated data for the municipality, which means that we do not know how a new IKEA store affects incumbent retailers within the municipality. Daunfeldt et al.'s (2014) estimated effects also include sales and employment of IKEA itself, and therefore give no insights into the existence and size of possible spillover effects on other retailers. ...
... following the entry of a Wal-Mart store. Daunfeldt et al (2014), who study entry by IKEA in Swedish municipalities, found that durable goods revenues increased by 20% as compared to similar municipalities where IKEA did not enter. Other studies, however, have found that big-box entrants might negatively affect total retail revenues. ...
Using data from 2001–2012, 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.
In general, the literature on the developmental state studies Asia and Latin America, not Scandinavia. This article examines the developmental character of the state in Sweden, distinguishing it as a specific case, because its institutions and policies combine the simultaneous promotion of industrialization and social equity. The paper analyzes the Swedish model of development, centered in Rehn-Meidner Plan (R-M), a political strategy of the national development headed by the Swedish Social Democratic Party (SAP). It is argued that in Sweden industrialization and the construction of the welfare state were two sides of the same coin. The R-M Plan played a key role in consolidating the Swedish model between 1945 and 1975. It combined and articulated economic development, centered on industrialization, reduction of social inequalities, and fiscal and monetary stability. It increased productive complexity and equality, unified economic policy and social policy, planned industrialization and income redistribution. It was structured through a broad power pact among workers, industry, farmers, political representatives elected by SAP and public bureaucracy. It was institutionalized, above all, by the democratic corporatist arrangement of centralized salary negotiations.
Opponents of big-box entry argue that large retail establishments generate noise and other types of pollution and a variety of negative externalities associated with traffic. Big-box advocates, on the other hand, argue that access to a large retail market delivers not only direct economic benefits but also a variety of positive spillover effects and therefore can be considered a consumer amenity that increases the attractiveness of the entry location. To test the validity of these competing arguments, we use the entry of IKEA in Sweden as a quasi-experiment and empirically investigate whether increased access to retail affects place attractiveness, which is proxied by residential property values. We find that IKEA entry increases the prices of the properties sold in the entry cities by, on average, 4.4% or 60,425 SEK (approximately 6,400 USD), but this effect is statistically insignificant for the properties in the immediate vicinity of the new IKEA retail trade area. In addition, we observe an attenuation of the effect with distance from the new IKEA store and the associated retail trade area, where the properties located 10 km away experience a 2% price increase. Our results are in line with some previous findings regarding the effects of entry by Walmart or supermarket stores in the US and show that large retailers have the potential to increase place attractiveness, but perhaps not in the immediate vicinity of the new establishment.
