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Entry regulations with implementation lag: Evidence from convenience store markets in Korea

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  • Seo, Seongmin
  • Park, Sang Soo

Abstract

Seocho County in Korea attempted to advance the interests of incumbent businesses by weakening competition in the convenience store market. To this end, it created a regulation impeding the opening of new convenience stores. Although this regulation intensified proximity restrictions between stores, our findings reveal that the announcement of legislation condemned incumbent businesses to unfavorable survival probabilities. We provided supporting evidence that so-called implementation lags—time lags between the announcement and implementation of policies—and adaptive behaviors of potential store owners may have caused unintended consequences. Our findings imply that policymakers should consider implementation lag and the adaptive behaviors of economic agents.

Suggested Citation

  • Seo, Seongmin & Park, Sang Soo, 2024. "Entry regulations with implementation lag: Evidence from convenience store markets in Korea," International Journal of Industrial Organization, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:indorg:v:93:y:2024:i:c:s0167718724000122
    DOI: 10.1016/j.ijindorg.2024.103057
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    More about this item

    Keywords

    Entry regulation; Implementation lag; Unintended consequence; Convenience store; Regression discontinuity design;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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