IDEAS home Printed from https://ideas.repec.org/p/ags/aaea16/235216.html
   My bibliography  Save this paper

Big-Box Retailers and Personal Income Growth in the U.S

Author

Listed:
  • Peralta, Denis
  • Kim, Man-Keun

Abstract

This paper addresses a research gap in the literature by investigating the impact of big-box retailers’ presence on personal income growth in U.S. counties between 2000 and 2005, based on neoclassical growth models of cross-country income convergence. Whether big-box retailers have a negative effect on local economic growth has been a permeating question amongst regional developers, policy makers and economists. Walmart’s and Target’s economic impacts are estimated in regards to the degree in which their individual presence affects personal income growth. Different model specifications are applied in the analysis, including spatial models that control for spatial autocorrelation. Results suggest that counties with the presence of both Walmart and Target stores have experienced slower growth in personal income - even after controlling for spatial autocorrelation. Walmart’s individual effect on personal income growth is negative and highly significant. Target’s individual effect is also negative, but statistically insignificant after controlling for spatial dependence.

Suggested Citation

  • Peralta, Denis & Kim, Man-Keun, 2016. "Big-Box Retailers and Personal Income Growth in the U.S," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235216, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235216
    DOI: 10.22004/ag.econ.235216
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/235216/files/Big-box%20retailers%20and%20income%20growth_aaea2016_draft.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.235216?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    2. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
    3. Stanley R. Keil & Lee C. Spector, 2005. "The Impact of Wal-Mart on Employment Andwage Differentials in Alabama," Working Papers 200508, Ball State University, Department of Economics, revised Dec 2005.
    4. Avinash Dixit, 1973. "The Optimum Factory Town," Bell Journal of Economics, The RAND Corporation, vol. 4(2), pages 637-654, Autumn.
    5. Thomas J. Holmes, 2011. "The Diffusion of Wal‐Mart and Economies of Density," Econometrica, Econometric Society, vol. 79(1), pages 253-302, January.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    7. Irwin, Elena G. & Clark, Jill, 2006. "Wall Street vs. Main Street: What are the Benefits and Costs of Wal-Mart to Local Communities?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 21(2), pages 1-6.
    8. Basker, Emek, 2011. "The Causes and Consequences of Wal-Mart’s Growth," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-134.
    9. Michael J Hicks, 2008. "Estimating Wal-Mart's Impacts in Maryland: A Test of Identification Strategies and Endogeneity Tests," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 34(1), pages 56-73, Winter.
    10. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
    11. Emek Basker, 2011. "Does Wal‐Mart Sell Inferior Goods?," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 973-981, October.
    12. Robert Jantzen & Donn Pescatrice & Andrew Braunstein, 2009. "Wal-Mart and the US Economy," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(3), pages 297-308.
    13. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
    14. Michael J. Hicks, 2007. "Job Turnover and Wages in the Retail Sector: The Influence of Wal-Mart," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 22(Spring 20), pages 137-160.
    15. repec:rre:publsh:v:35:y:2005:i:3:p:336-55 is not listed on IDEAS
    16. Stephan J. Goetz & Hema Swaminathan, 2006. "Wal‐Mart and County‐Wide Poverty," Social Science Quarterly, Southwestern Social Science Association, vol. 87(2), pages 211-226, June.
    17. James P. LeSage, 2014. "What Regional Scientists Need to Know about Spatial Econometrics," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 13-32, Spring.
    18. Georgeanne M. Artz & Kenneth E. Stone, 2006. "Analyzing the Impact of Wal-Mart Supercenters on Local Food Store Sales," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1296-1303.
    19. James, Alex & Aadland, David, 2011. "The curse of natural resources: An empirical investigation of U.S. counties," Resource and Energy Economics, Elsevier, vol. 33(2), pages 440-453, May.
    20. Higgins, Matthew J. & Levy, Daniel & Young, Andrew T., 2006. "Growth and Convergence across the United States: Evidence from County-Level Data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 88(4), pages 671-681.
    21. Alessandro Bonanno & Stephan J. Goetz, 2012. "WalMart and Local Economic Development," Economic Development Quarterly, , vol. 26(4), pages 285-297, November.
    22. Stephan J. Goetz & Sundar S. Shrestha, 2009. "Explaining Self‐Employment Success and Failure: Wal‐Mart Versus Starbucks, or Schumpeter Versus Putnam," Social Science Quarterly, Southwestern Social Science Association, vol. 90(1), pages 22-38, March.
    23. Barnes, Nora Ganim & Connell, Allison & Hermenegildo, Lisa & Mattson, Lucinda, 1996. "Regional differences in the economic impact of Wal-Mart," Business Horizons, Elsevier, vol. 39(4), pages 21-25.
    24. Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
    25. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alessandro Bonanno & Stephan J. Goetz, 2012. "WalMart and Local Economic Development," Economic Development Quarterly, , vol. 26(4), pages 285-297, November.
    2. Rudholm, Niklas & Li, Yuijao & Kenneth, Carling, 2018. "How Does Big-Box Entry Affect Labor Productivity in Durable Goods Retailing? A Synthetic Control Approach," HUI Working Papers 130, HUI Research.
    3. Donald Vandegrift & John Loyer, 2015. "The Effect Of Walmart And Target On The Tax Base: Evidence From New Jersey," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 159-187, March.
    4. Donald Vandegrift, 2016. "The effect of Walmart and Target on property tax rates," Letters in Spatial and Resource Sciences, Springer, vol. 9(3), pages 309-327, October.
    5. Niklas Rudholm & Yujiao Li & Kenneth Carling, 2022. "How does big-box retail entry affect labor productivity in durable goods retailing? A synthetic control approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(1), pages 89-117, August.
    6. Vandegrift, Donald & Loyer, John & Kababik, David, 2011. "The effect of Walmart on the tax base: evidence from New Jersey," MPRA Paper 30937, University Library of Munich, Germany.
    7. Håkansson, Johan & Li, Yujiao & Mihaescu, Oana & Rudholm, Niklas, 2016. "Big-box retail entry in urban and rural areas: Are there productivity spillovers to incumbent retailers?," HUI Working Papers 118, HUI Research.
    8. Borrescio-Higa, Florencia, 2015. "Can Walmart make us healthier? Prescription drug prices and health care utilization," Journal of Health Economics, Elsevier, vol. 44(C), pages 37-53.
    9. Sven-Olov Daunfeldt & Oana Mihaescu & Helena Nilsson & Niklas Rudholm, 2017. "What happens when IKEA comes to town?," Regional Studies, Taylor & Francis Journals, vol. 51(2), pages 313-323, February.
    10. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2008. "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, Elsevier, vol. 63(2), pages 405-430, March.
    11. Han, Mengjie & Mihaescu, Oana & Li, Yujiao & Rudholm, Niklas, 2018. "Comparison and one-stop shopping after big-box retail entry: A spatial difference-in-difference analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 40(C), pages 175-187.
    12. Freedman, Emily A. & McConnon Jr., James C. & Hunt, Gary L. & Gabe, Todd M., 2016. "An Analysis of the Economic Impacts of Big-Box Stores on a Community’s Retail Sector: Evidence from Maine," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    13. Schuetz, Jenny, 2015. "Why are Walmart and Target Next-Door neighbors?," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 38-48.
    14. Stone, Kenneth E. & Artz, Georgeanne M., 2012. "Revisiting Wal-Mart's Impact on Iowa Small Town Retail: Twenty-Five Years Later," Staff General Research Papers Archive 35203, Iowa State University, Department of Economics.
    15. Pope, Devin G. & Pope, Jaren C., 2015. "When Walmart comes to town: Always low housing prices? Always?," Journal of Urban Economics, Elsevier, vol. 87(C), pages 1-13.
    16. Matias Busso & Sebastian Galiani, 2019. "The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 33-56, January.
    17. Richard Volpe, 2014. "Supercenters, Unionized Labor, and Performance in Food Retail," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(2), pages 325-355, April.
    18. Bonanno, Alessandro & Lopez, Rigoberto A., 2012. "Wal-Mart's monopsony power in metro and non-metro labor markets," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 569-579.
    19. Michael J. Hicks & Stanley R. Keil & Lee C. Spector, 2012. "Mom-and-Pops or Big Box Stores," Economic Development Quarterly, , vol. 26(4), pages 311-320, November.
    20. Michael Hicks, 2015. "Does Wal-Mart Cause an Increase in Anti-Poverty Expenditures?," Social Science Quarterly, Southwestern Social Science Association, vol. 96(4), pages 1136-1152, December.

    More about this item

    Keywords

    Agribusiness; Community/Rural/Urban Development;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea16:235216. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.