Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning

37 Pages Posted: 28 Feb 2006

See all articles by Jonathan Beck

Jonathan Beck

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management)

Michal Grajek

ESMT European School of Management and Technology

Christian Wey

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE)

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Date Written: November 2005

Abstract

This paper presents a set of panel data to study the diffusion of retail checkout barcode scanning in ten European countries over the period 1981-1996. Estimates from a standard diffusion model suggest that countries differ most in the long-run diffusion level of barcode scanning and less in timing or diffusion speed. We present evidence that the emergence of hypermarkets raises competitive intensity and use hypermarket data, among other variables, in a pooled estimation. Results suggest that hypermarket competition reduces the long-run adoption level in retailing. In particular, the emergence of hypermarkets seems to deepen retail segmentation by inducing potential adopters (e.g. supermarkets) to exit the market and/or by discouraging adoption by other retail formats. Consistent with expectations, scale and income effects spur IT diffusion and there is a classic substitution effect: when wages rise, diffusion of a labour-saving technology such as barcode scanning is more intense. We do not find a significant impact of employment protection legislation.

Keywords: IT diffusion, retail competition, hypermarkets

JEL Classification: L5, L81, O33

Suggested Citation

Beck, Jonathan and Grajek, Michal and Wey, Christian, Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning (November 2005). CEPR Discussion Paper No. 5386, Available at SSRN: https://ssrn.com/abstract=887390

Jonathan Beck

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

HOME PAGE: http://www.ice.bwl.uni-muenchen.de/personen/assoziierte/beck/index.html

Michal Grajek

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin, 10178
Germany

Christian Wey (Contact Author)

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany
+49-211-81-15009 (Phone)
+49-211-81-15499 (Fax)

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