Does Planning Regulation Protect Independent Retailers?

75 Pages Posted: 10 Jan 2014 Last revised: 4 Feb 2023

See all articles by Raffaella Sadun

Raffaella Sadun

Harvard University - Strategy Unit; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: January 2014

Abstract

Regulations aimed at curbing the entry of large retail stores have been introduced in many countries to protect independent retailers. Analyzing a planning reform launched in the United Kingdom in the 1990s, I show that independent retailers were actually harmed by the creation of entry barriers against large stores. Instead of simply reducing the number of new large stores entering a market, the entry barriers created the incentive for large retail chains to invest in smaller and more centrally located formats, which competed more directly with independents and accelerated their decline. Overall, these findings suggest that restricting the entry of large stores does not necessarily lead to a world with fewer stores, but one with different stores, with uncertain competitive effects on independent retailers.

Suggested Citation

Sadun, Raffaella, Does Planning Regulation Protect Independent Retailers? (January 2014). NBER Working Paper No. w19797, Available at SSRN: https://ssrn.com/abstract=2377134

Raffaella Sadun (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
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HOME PAGE: http://people.hbs.edu/rsadun

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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