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SPATIAL COMPETITION AND STRATEGIC FIRM RELOCATION

Authors

  • KEVIN E. HENRICKSON

    1. Henrickson: Assistant Professor of Economics, Gonzaga University, Spokane, WA 99258. Phone 1-509-313-3408, Fax 1-509-313-5811, E-mail henrickson@jepson.gonzaga.edu
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    • I am grateful to Tim Brennan (the editor), the anonymous referees, Wesley Wilson, Randall Bennett, and seminar participants in the Economics Department at Washington State University for helpful comments and discussions.


Abstract

Firms compete spatially for customers who have some degree of brand loyalty. The number and attractiveness of the alternatives available to these customers dictates the level of competition facing firms. In this study, data on ticket pricing in four professional sports leagues are used to empirically examine the existence of spatial competition in sports, and the impact of space on team relocations. Results, allowing for structural breaks over time while using spatial autoregressive techniques, suggest that sports franchises spatially compete when pricing their tickets, and that spatial characteristics, including the level of spatial competition, have influenced the relocation of teams. (JEL D40, L11, R30, L83)

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