Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246765 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
HFI Working Paper No. 11
Publisher: 
Institute of Retail Economics (HFI), Stockholm
Abstract: 
This study examines the entry effects of a durable goods big box, IKEA, on incumbent firms in the retail, accommodation and restaurant sectors in Sweden. Using a difference-in-difference approach combined with matching, the effects of IKEA entry on the net turnover and employment of incumbent firms located at varying distances from the new IKEA store are examined. The results show that entry by IKEA increases the net turnover of retail firms near the entry site that sell complement goods, indicating that IKEA entry causes demand spillovers due to multipurpose shopping. IKEA entry also increases the net turnover of accommodation firms in the region, which indicates that the entrant has a positive effect on the attractivity of the area. The estimations reveal no effects on retail firms located in the affected city centers, which suggests that retail in central places may have a certain resilience to competition from out-of-town retail clusters. No robust effects on substitute goods retailers or restaurants are found.
Subjects: 
IKEA
retail
hospitality
agglomeration economies
competition
difference-in-difference
JEL: 
C33
D22
L81
L83
Document Type: 
Working Paper

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