Retail Format as a Barrier to Entry

22 Pages Posted: 30 Jul 2009 Last revised: 30 Mar 2016

See all articles by Avi Goldfarb

Avi Goldfarb

University of Toronto - Rotman School of Management

Sampsa Samila

University of Navarra, IESE Business School

Brian S. Silverman

University of Toronto - Rotman School of Management

Date Written: March 29, 2016

Abstract

“Barriers to entry” form a key construct in strategy scholarship and pedagogy. However, limited empirical evidence exists for many putative barriers. For example, although considerable evidence suggests that managers perceive the existence of significant distribution-related barriers to entry, there is virtually no empirical evidence for distribution’s actual role as an entry barrier. We exploit a field experiment conducted by Systembolaget, the Swedish government alcohol retail monopoly, and examine the role of changes in distribution through a randomized change from counter-service to self-service stores. We find that self-service stores sell much higher product variety and new entrants do better in self-service stores. The increase in variety is comparable to the change from catalog sales to internet.

Keywords: field experiments, barriers to entry, market concentration, retail, alcohol

JEL Classification: L10, L50

Suggested Citation

Goldfarb, Avi and Samila, Sampsa and Silverman, Brian S., Retail Format as a Barrier to Entry (March 29, 2016). Available at SSRN: https://ssrn.com/abstract=1440951 or http://dx.doi.org/10.2139/ssrn.1440951

Avi Goldfarb

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-946-8604 (Phone)
416-978-5433 (Fax)

Sampsa Samila (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Brian S. Silverman

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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