Entry of large (“big-box”) stores along with a drastic fall in the total number of stores is a striking trend in retail markets. We use a dynamic structural model to estimate retail productivity in a local market setting. In particular, we provide a general strategy of how to measure the...

We use a dynamic model to measure the impact of the entry of large stores on incumbents' productivity separate from demand while accounting for local markets and the endogeneity of entry. Using data on all retail food stores in Sweden, we find that incumbents' productivity increases after the...