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Global Retail Chains and the Supplying Industries: Evidence from Romania

Author

Listed:
  • Beata S. Javorcik
  • Yue Li

Abstract

Despite the controversy often surrounding retail sector liberalization, there little empirical evidence on the implications of such a reform. Using data from Romania, this study sheds light on what happens to the supplying industries after a country opens its retail sector to foreign direct investment. The study relies on a unique dataset combining outlet-specific information on global retail chains with a panel of Romanian manufacturing firms. The difference-in-difference analysis finds that the expansion of global retail chains leads to a significant increase in the total factor productivity (TFP) in the supplying manufacturing industries: their entry into a region raises the TFP by 3.8–4.7%. These results suggest that liberalizing retail sector can boost performance of domestic manufacturing. (JEL codes: F23, F14, L81, D24)

Suggested Citation

  • Beata S. Javorcik & Yue Li, 2014. "Global Retail Chains and the Supplying Industries: Evidence from Romania," CESifo Economic Studies, CESifo Group, vol. 60(1), pages 107-134.
    • Handle: RePEc:oup:cesifo:v:60:y:2014:i:1:p:107-134.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifu007
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    Citations

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    Cited by:

    1. Angela Cheptea, 2014. "Do multinational retailers affect the export competitveness of host countries?," IAW Discussion Papers 106, Institut für Angewandte Wirtschaftsforschung (IAW).
    2. Cheptea, Angela, 2016. "Multinational retailers and host countries’ export competitiveness," 149th Seminar, October 27-28, 2016, Rennes, France 244952, European Association of Agricultural Economists.
    3. Apostolov Mico & Scagnelli Simone Domenico, 2019. "Foreign-Versus Domestic-Owned firms in the Predicament ‘Cui bono?’," Business Systems Research, Sciendo, vol. 10(2), pages 18-36, September.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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