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Spatial Competition And Strategic Firm Relocation

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  • KEVIN E. HENRICKSON

Abstract

Firms compete spatially for customers who have some degree of brand loyalty. The number and attractiveness of the alternatives available to these customers dictates the level of competition facing firms. In this study, data on ticket pricing in four professional sports leagues are used to empirically examine the existence of spatial competition in sports, and the impact of space on team relocations. Results, allowing for structural breaks over time while using spatial autoregressive techniques, suggest that sports franchises spatially compete when pricing their tickets, and that spatial characteristics, including the level of spatial competition, have influenced the relocation of teams. (JEL D40, L11, R30, L83)

Suggested Citation

  • Kevin E. Henrickson, 2012. "Spatial Competition And Strategic Firm Relocation," Economic Inquiry, Western Economic Association International, vol. 50(2), pages 364-379, April.
    • Handle: RePEc:bla:ecinqu:v:50:y:2012:i:2:p:364-379
    DOI: j.1465-7295.2010.00302.x
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    References listed on IDEAS

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    Cited by:

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    2. Brueckner, Jan K. & Luo, Dan, 2014. "Measuring strategic firm interaction in product-quality choices: The case of airline flight frequency," Economics of Transportation, Elsevier, vol. 3(1), pages 102-115.
    3. Henrickson, Kevin E. & Langrill, Ryan, 2013. "Spatial Econometrics In Nonspatial Settings," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 9(1-2), January.
    4. Kevin Mongeon & Jason Winfree, 2013. "The Effects of Cross-Ownership and League Policies Across Sports Leagues Within a City," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(3), pages 145-162, November.
    5. Michal Friesl & Liam J. A. Lenten & Jan Libich & Petr Stehlík, 2017. "In search of goals: increasing ice hockey’s attractiveness by a sides swap," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(9), pages 1006-1018, September.
    6. Kevin E. Henrickson & Erica H. Johnson, 2013. "The Demand for Spatially Complementary National Parks," Land Economics, University of Wisconsin Press, vol. 89(2), pages 330-345.
    7. Brian M. Mills & Jason A. Winfree & Mark S. Rosentraub & Ekaterina Sorokina, 2015. "Fan substitution between North American professional sports leagues," Applied Economics Letters, Taylor & Francis Journals, vol. 22(7), pages 563-566, May.
    8. Brad R. Humphreys & Amir B. Ferreira Neto, 2020. "Localization Economies and Firm Productivity: Evidence from Football Teams in Sao Paulo, Brazil," Working Papers 20-09, Department of Economics, West Virginia University.
    9. Brian M. Mills & Mark S. Rosentraub, 2014. "The National Hockey League and Cross-Border Fandom," Journal of Sports Economics, , vol. 15(5), pages 497-518, October.

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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