Imports 'R' Us: Retail Chains as Platforms for Developing-Country Imports

Abstract:     
By exploiting the uneven consolidation in the retail sector over the past few years we find that Chinese and other LDC imports are disproportionately sold by the largest retail firms. Smaller retailers sell almost as many imports but they are more likely to import from high-cost source countries. We apply a numerical algorithm to compute marginal propensities to import by firm size. The largest retail firms' propensity to import from China is 17 percentage points higher than that of smaller retailers; the corresponding difference in import propensities from LDCs as a whole is 27 points. The disproportionate growth of large retailers between 1997 and 2002 explains 5% of the overall growth in consumer goods imports, 20% of the growth in consumer goods imports from China, and 22% of the growth in consumer goods imports from LDCs.

Keywords: Imports, Retail Chains

JEL Classifications: F14, L11, L81

Working Paper Series