Does Big Drive Out Small?
Entry, Exit, and Differentiation in the Supermarket Industry
Authors Open Access
First Online: 05 February 2011 DOI:
Cite this article as: Igami, M. Rev Ind Organ (2011) 38: 1. doi:10.1007/s11151-011-9278-8
This paper measures the impact of the entry of large supermarkets on incumbents of various sizes. Contrary to the conventional notion that big stores drive small rivals out of the market, data from Tokyo in the 1990s show that large supermarkets’ entry induces the exit of existing large and medium-size competitors, but
improves the survival rate of small supermarkets. These findings highlight the role of store size as an important dimension of product differentiation. Size-based entry regulations would appear to protect big incumbents, at the expense of small incumbents and potential entrants.
Entry and exit
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