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

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.

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Conference Paper/ Presentation
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JEL Codes:
O47; O51; R11

 Record created 2017-04-01, last modified 2018-01-23

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