Do supermarkets reduce the number of traditional bookshops? An empirical application to the textbook market in Spain

Some countries, especially in Europe, regulate the textbook market due to its special characteristics. In 2000, the Spanish Government passed a law that relaxes resale price maintenance and lets retailers give discounts of up to 25% off the gross price. Traditional bookshops do not favour this policy. We construct a database for the Canary Islands (a Spanish Autonomous Community) on schools, bookshops, population and other control factors. Our empirical objectives are twofold: first, we explore whether malls force the exit (or encourage entry) of bookshops; second, we test whether these larger retailers decrease consumer welfare by increasing distance from schools to points of sale. The results show that malls are not as bad as bookshops claim