The Geography of Retail Inventory

32 Pages Posted: 21 Mar 2006 Last revised: 9 Feb 2009

See all articles by Richard K. Lai

Richard K. Lai

The Wharton School, Univ. of Pennsylvania

Date Written: December 29, 2005


How different are retailers' inventory levels around the world? Specifically, are retailers' inventories constant across countries, converging, or at least co-integrating? These might be viewed as various forms of global determinism. To see which of these forms hold, I use a novel dataset integrated from Dow Jones, Edgar, Bureau van Dijk (Europe), World'Vest Base, Multex, KIS (Korea Information Service), Teikoku of Japan, Huaxia of China, and COMPUSTAT. The dataset consists of 27,000 firm-year observations for 4,100 retailers in 23 countries, for the period 1983 through 2004. I find evidence to reject all the three forms of global determinism. Instead, I report evidence consistent with an alternative hypothesis - local contingency - in which country effects can explain inventory differences around the world. I also show that this conclusion is robust in numerous ways.

Keywords: Inventory, retailing, international comparison, global determinism, local contingency

JEL Classification: D24, D82, M11, E32

Suggested Citation

Lai, Richard K., The Geography of Retail Inventory (December 29, 2005). Available at SSRN: or

Richard K. Lai (Contact Author)

The Wharton School, Univ. of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215 898 1630 (Phone)

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