Working Paper: CEPR ID: DP10836
Authors: Andrea Pozzi; Fabiano Schivardi
Abstract: We survey the empirical literature analyzing the consequences of entry regulation in retail industries. We begin by providing some background on the most common forms of entry regulation and their rationales. We use OECD data to show evidence of a general trend towards less stringent entry regulation in the past 15 years. However, substantial heterogeneity persists across countries. Next, we review a number of empirical contributions that analyze the effects of entry regulation on market outcomes. We compare studies relying on quasi-experimental variation in regulation to those based on structural models and comment on strengths and challenges of each approach. We summarize the results obtained by the literature with respect to several important outcomes that entry regulation can be expected to affect, such as market structure, entry, productivity and employment. We conclude presenting a few relevant topics that the literature has yet to address and, therefore, represent promising avenues for future research.
Keywords: Entry Regulation; Retail Trade
JEL Codes: L5; L81; R52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Stricter entry regulations (Z38) | Increased market concentration (D49) |
| Reforms reducing registration costs (K29) | Increased entry rates in affected industries (J68) |
| Entry regulation (K20) | Negative impact on productivity (F66) |
| Stricter entry regulations (Z38) | Lower total factor productivity (O49) |
| Entry regulation (K20) | Reducing competition and innovation incentives among incumbents (L49) |
| Entry regulation (K20) | Employment levels (J23) |
| Higher entry barriers (D43) | Increased wages (J31) |
| Entry regulation (K20) | Significant implications for market structure, competition, productivity, and employment (L11) |
| Stricter entry regulations (Z38) | Limiting the number of firms in a market (L13) |