53rd Congress of the European Regional Science Association: "Regional Integration: Europe, the Mediterranean and the World Economy", 27-31 August 2013, Palermo, Italy
This paper investigates the impact of market accessibility on productivity, where market potential is calculated in terms of the time-distances between market places of different aggregation levels, and wage sums in the respective markets. In particular, the empirical analysis explores the productivity in retail sector where overall economy is used as a benchmark. Analysis is conducted for central and peripheral market places separately to see whether there is a notable variation implying an urban-periphery structure when it comes to the impact of market size on productivity in the Swedish economy. Retail sector is in the focus of the study because it is constituted by economic activities that are highly dependent on proximity to demand and density in the market place. Consequently, following the theoretical foundation on productivity returns to scale and density, one can expect an higher impact in the retail sector compared to the rest of the economy. Based on this proposition, this paper provides an empirical investigation where individual earnings in the entire economy are investigated first on establishment level and on individual level. Several characteristics of establishments, the economic milieu and individuals are taken into consideration in the empirical design. This paper contributes to the existing literature by introducing an overall retail productivity analysis where the entire economy is in question. Instead of examining retail trade in terms of geographically aggregate measures, and sector specific output measures that are not easy to compare across industries, paper treats individual earnings as a proxy for productivity which enables for an in-depth comparative analysis.