Paul L. E. Grieco

Wal-Mart and the Geography of Grocery Retailing

This paper empirically examines the impact of entry by Wal-Mart on competition in the supermarket industry. Using a detailed panel dataset spanning 1994 to 2006, we estimate the impact of Wal-Mart on three key outcome variables (revenue, employment, and store size), controlling for persistent local trends and systematic dierences across markets by exploiting the detailed spatial structure of our store-level census. We nd that Wal-Mart’s impact is highly localized, aecting rms only within a tight, three-mile radius of its location. Within this radius, the bulk of the impact falls on declining rms { entry and expansion by growing rms are essentially unaected. Moreover, the stores most damaged by Wal-Mart’s entry are the outlets of larger chains. This suggests that Wal-Mart’s expansion into groceries is quite distinct from its earlier experience in the discount industry, where the primary casualties were single outlet rms and sole proprietorships. This contrast sheds light on the role density economies play in shaping both equilibrium market structure and economic geography. In the case of grocery competition, high travel costs and the perishable nature of groceries appear to impart horizontal dierentiation betweenThis paper empirically examines the impact of entry by Wal-Mart on competition in the supermarket industry. Using a detailed panel dataset spanning 1994–2006, we estimate the impact of Wal-Mart on firm outcomes and market structure, controlling for persistent local trends and systematic differences across markets by exploiting the detailed spatial structure of our store-level census. We find that Wal-Mart’s impact is highly localized, affecting firms only within a tight, two-mile radius of its location. Within this radius, the bulk of the impact falls on declining firms and mostly on the intensive margin. Entry of new firms is essentially unaffected. Moreover, the stores most damaged by Wal-Mart’s entry are the outlets of larger chains. This suggests that Wal-Mart’s expansion into groceries is quite distinct from its earlier experience in the discount industry, where the primary casualties were small chains and sole proprietorships that were forced to exit the market. This contrast sheds light on the role density economies play in shaping both equilibrium market structure and economic geography. In the case of grocery competition, high travel costs and the perishable nature of groceries appear to impart horizontal differentiation between firms. This differentiation in demand appears to reduce impact of scale economies advantages that Wal-Mart exploited to the detriment of far-flung competitors in the discount store industry.

The Payoff to America from Globalisation

This article summarizes the economic payoff to the United States from its postwar trade opening and estimates the potential future gains from more opening going forward. To quantify these gains, we survey different methodologies and estimates. We find that trade opening since World War II has added between

Production Function Estimation with Unobserved Input Price Dispersion

800 billion to

What Drives Home Market Advantage

1.4 trillion to the US economy, or about

What drives home market advantage

7,000 to

Measuring Competition in Spatial Retail

13,000 per household. More speculative estimates of the potential additional gains from removing the rest of US trade barriers range from

Discrete games with flexible information structures: an application to local grocery markets

400 billion to

Mobility and Mortgages: Evidence from the PSID

1.3 trillion, or about

Who pays for switching costs

4,000 to

Borders, Geography, and Oligopoly: Evidence from the Wind Turbine Industry

12,000 per household. Since trade opening permanently raises national income, these gains are enjoyed annually. Trade opening inevitably entails adjustment costs. We estimate that the lifetime cost of all worker dislocations that have been triggered by expanded trade in the United States could be as high as