The Effects of Dollar General Opening on Next Door Firms

36 Pages Posted: 14 Jun 2024

See all articles by Amelia Biehl

Amelia Biehl

Florida Gulf Coast University

Amir B. Ferreira Neto

Florida Gulf Coast University

Juan Tomas Sayago

University of Iowa

Abstract

The 17,000th Dollar General store opened in 2020, as the company, which has locations in 46 states, added 1,000 new stores in 14 months. Dollar General is a low-cost retailer that makes shopping convenient by utilizing small stores, rather than following the traditional big box approach. Using the National Establishment Time Series dataset (NETS) for the state of Florida between 1990 and 2019, we use the difference in timing of Dollar General openings to investigate its effect on small businesses nearby. Specifically, we quantify the effects on nearby firm revenue, employment, and likelihood of exit. The unique nature of the NETS data allows us to focus on the impacts of businesses in narrower setting and determine a treatment group of firms within 0.5-mile radius, rather than using pre-defined geo-political boundaries. Our results suggest Dollar General can drive some firms out of business but provide positive spillovers in terms of revenues and employment for the ones that survive. These results are heterogenous across industries and retail subgroups.

Keywords: Dollar General, Employment, Local Impacts, NETS, Local Business

Suggested Citation

Biehl, Amelia and Borges Ferreira Neto, Amir and Sayago, Juan Tomas, The Effects of Dollar General Opening on Next Door Firms. Available at SSRN: https://ssrn.com/abstract=4864853 or http://dx.doi.org/10.2139/ssrn.4864853

Amelia Biehl

Florida Gulf Coast University ( email )

Amir Borges Ferreira Neto

Florida Gulf Coast University ( email )

Lutgert College of Business
10501 FGCU Boulevard South
Fort Myers, FL 33965-6565
United States
33965-6565 (Fax)

HOME PAGE: http://www.amirneto.com

Juan Tomas Sayago (Contact Author)

University of Iowa ( email )

341 Schaeffer Hall
Iowa City, IA 52242-1097
United States

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