Does Organisational Form Drive Competition? Evidence from Coffee Retailing
13 Pages Posted: 14 Jun 2018
Date Written: June 2018
Independent and chain coffee shops offer similar products, but differ in their organisational form and branding. We examine the entry and exit patterns of 4,768 coffee retailers in Melbourne between 1991 and 2010. Panel logit regressions indicate that chain stores have no discernible effect on the exit or entry decisions of independent stores. However, chains and independents do increase the probability of exit for neighbouring stores of their own type. These findings imply that independents and chains operate almost as though they are in separate markets.
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