Article | Economica | September 2011

Regulation and UK Retailing Productivity: Evidence from Microdata

by Jonathan Haskel and Raffaella Sadun

Abstract

We explore the effects of planning regulation on the UK retail sector between 1997 and 2003 using micro-data from the UK census. We document a shift to smaller shops following a 1996 regulatory change that increased the costs of opening large stores. Our analysis suggests that total factor productivity (TFP) of multi-store retail chains fell after the introduction of the reform due to the reduction in store size. Overall, the reduction in store size was associated with TFP of retail chains falling by 0.4% per annum, or 40% of the post-1995 slowdown in UK retail TFP growth.

Keywords: Governing Rules, Regulations, and Reforms; Performance Productivity; Growth and Development; Economic Slowdown and Stagnation; Management Analysis, Tools, and Techniques; Change; Cost; Retail Industry; United Kingdom;

Citation:

Haskel, Jonathan, and Raffaella Sadun. "Regulation and UK Retailing Productivity: Evidence from Microdata." Economica (September 2011).