The effect of legal barriers to entry in the Spanish retail market: a local market approach.

Abstract

Recent studies have shown that barriers to entry for large retail establishments in Spain have been increased in the last decade. Using information on local markets, we test whether the entry of large retail establishments was effectively limited by regional regulation and whether it effectively protected in-town shops from competition. We find that if entry barriers were reduced to their average level in 1997, the number of large retail establishments would increase by 11.7%. We also find that over-regulation in 1997 has improved in-town shops’ market position, with their number increasing by 13.8%.Barriers to entry, retail distribution, regulation