Retail Agglomeration and Competition Externalities: Evidence from Openings and Closings of Multiline Department Stores in the US

53 Pages Posted: 6 Apr 2015 Last revised: 29 Mar 2018

See all articles by John M. Clapp

John M. Clapp

University of Connecticut - Department of Finance; Homer Hoyt Institute

Stephen L. Ross

University of Connecticut - Department of Economics

Tingyu Zhou

Florida State University

Date Written: April 5, 2015

Abstract

From the perspective of an existing retailer, the optimal size of a cluster of retail activity represents a trade-off between the marginal increases in consumer attraction from another store against the depletion of the customer base caused by an additional competitor. We estimate opening and closing probabilities of multi-line department stores (“anchors”) as a function of pre-existing anchors by type of anchor store (low-priced, mid-priced or high-priced) using a bias corrected probit model with county and year fixed effects. We find strong negative competitive effects of an additional same type but no effect on openings of anchors of another type.

Keywords: Multi-line Department Stores, Shopping Centers, Openings, Closings, Bias-Corrected Probit

JEL Classification: D430, L1, L21, L81, R1, R3, R12, R33

Suggested Citation

Clapp, John M. and Ross, Stephen L. and Zhou, Tingyu, Retail Agglomeration and Competition Externalities: Evidence from Openings and Closings of Multiline Department Stores in the US (April 5, 2015). Journal of Business and Economic Statistics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2590082 or http://dx.doi.org/10.2139/ssrn.2590082

John M. Clapp

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States
860-983-3685 (Phone)
860-486-0349 (Fax)

Homer Hoyt Institute ( email )

United States

HOME PAGE: http://hoytgroup.org/weimer-school-and-fellows/

Stephen L. Ross (Contact Author)

University of Connecticut - Department of Economics ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States
860-486-3533 (Phone)
860-486-4463 (Fax)

Tingyu Zhou

Florida State University ( email )

821 Academic Way
Tallahassee, FL 32306
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
146
Abstract Views
1,134
Rank
396,081
PlumX Metrics