Working Paper: CEPR ID: DP5386
Authors: Jonathan Beck; Michal Grajek; Christian Wey
Abstract: This paper presents a set of panel data to study the diffusion of retail checkout barcode scanning in ten European countries over the period 1981-1996. Estimates from a standard diffusion model suggest that countries differ most in the long-run diffusion level of barcode scanning and less in timing or diffusion speed. We present evidence that the emergence of hypermarkets raises competitive intensity and use hypermarket data, among other variables, in a pooled estimation. Results suggest that hypermarket competition reduces the long-run adoption level in retailing. In particular, the emergence of hypermarkets seems to deepen retail segmentation by inducing potential adopters (e.g. supermarkets) to exit the market and/or by discouraging adoption by other retail formats. Consistent with expectations, scale and income effects spur IT diffusion and there is a classic substitution effect: when wages rise, diffusion of a labour-saving technology such as barcode-scanning is more intense. We do not find a significant impact of employment protection legislation.
Keywords: hypermarkets; IT diffusion; retail competition
JEL Codes: L5; L81; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| hypermarket competition (L11) | diffusion of barcode scanning (L96) |
| hypermarket competition (L11) | exit of potential adopters (J63) |
| hypermarket entry (L81) | potential adopters remaining in the market (R21) |
| hypermarket adoption of barcode scanning (L81) | discourage subsequent adoptions (J12) |