HAS WAL-MART BURIED MOM AND POP?: THE IMPACT OF WAL-MART ON SELF-EMPLOYMENT AND SMALL ESTABLISHMENTS IN THE UNITED STATES

Authors

  • RUSSELL S. SOBEL,

    1. Sobel: James Clark Coffman Distinguished Chair, Department of Economics and Entrepreneurship Center, West Virginia University, Morgantown, WV 26506-6025. Phone 1-304-293-7864, Fax 1-304-293-5652, E-mail russell.sobel@mail.wvu.edu
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      The authors would like to thank David Gay, Randall Childs, and Amy Higginbotham for help in acquiring data and Jim LeSage and Todd Nesbit for help with the spatial econometric programs we employ. We are indebted also to Peter Leeson, William Trumbull, Edward Lopez, two anonymous referees, and various conference and seminar participants for helpful comments and suggestions.

  • ANDREA M DEAN

    1. Dean: Kendrick Fellow, Department of Economics and Entrepreneurship Center, West Virginia University, Morgantown, WV 26506-6025. Phone 1-304-293-7877, Fax 1-304-293-5652, E-mail andrea.dean@mail.wvu.edu
    Search for more papers by this author
    • *

      The authors would like to thank David Gay, Randall Childs, and Amy Higginbotham for help in acquiring data and Jim LeSage and Todd Nesbit for help with the spatial econometric programs we employ. We are indebted also to Peter Leeson, William Trumbull, Edward Lopez, two anonymous referees, and various conference and seminar participants for helpful comments and suggestions.


Abstract

This paper explores the widely accepted view that Wal-Mart causes significant harm to the traditional, small “mom and pop” business sector of the U.S. economy. We present the first rigorous econometric investigation of this issue by examining the rate of self-employment and the number of small employer establishments using both time series and cross-sectional data. We also examine alternative measures and empirical techniques for robustness. Contrary to popular belief, our results suggest that the process of creative destruction unleashed by Wal-Mart has had no statistically significant long-run impact on the overall size and profitability of the small business sector in the United States. (JEL L81, D59, C21)

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