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The impact of Wayfair vs. South Dakota on retailers: an event study

Author

Listed:
  • Euikyu Choi

    (West Chester University of Pennsylvania)

  • Wei Du

    (West Chester University of Pennsylvania)

  • Caitlin Riley

    (West Chester University of Pennsylvania)

Abstract

We study the impact of the supreme court ruling of Wayfair vs. South Dakota on the retailing industry. We do so by examining financial market reactions to the ruling. Specifically, we find positive abnormal returns for local retailers and insignificant results for online retailers. Our results are consistent with the notion that the supreme court ruling benefited the local retailers due to the removal of the tax loophole that put them at a disadvantage versus online retailers.

Suggested Citation

  • Euikyu Choi & Wei Du & Caitlin Riley, 2021. "The impact of Wayfair vs. South Dakota on retailers: an event study," Economics Bulletin, AccessEcon, vol. 41(3), pages 1180-1186.
    • Handle: RePEc:ebl:ecbull:eb-20-01125
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P99.pdf
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    More about this item

    Keywords

    sales tax; retailers; competition; stock returns;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L8 - Industrial Organization - - Industry Studies: Services

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