Hicks, Michael (2006): Transportation and Infrastructure, Retail Clustering, and Local Public Finance: Evidence from Wal-Mart's Expansion. Published in: Regional Economic Development , Vol. 2, No. 2 (2006): pp. 100-114.
Download (214Kb) | Preview
The author examines the role highway infrastructure and local property tax rate variability play in retail agglomeration in Indiana from 1988 through 2003. To account for data errors and the potential endogeneity of taxes and infrastructure on retail agglomeration, he introduces a unique identification strategy that exploits the entrance timing and location of Wal-Mart stores in Indiana. Using a time-series cross-sectional model of Indiana’s 92 counties from 1988 through 2003, he estimates the impact highway infrastructure, property taxes, and big-box competition have in creating regional agglomerations. Among two separate specifications and a full and rural-only set of the data, the author finds considerable agreement in the results. In the full sample, he finds no relationship between property tax rates or highway infrastructure and retail agglomeration. Within the non-metropolitan statistical area (MSA) counties, this relationship is very modest, though it possesses considerable statistical certainty. Highway impacts within the non-MSA counties are significant and positively related to retail agglomeration, with the presence of highways explaining about 10 percent of total agglomeration variability. (JEL R11, R53)
|Item Type:||MPRA Paper|
|Original Title:||Transportation and Infrastructure, Retail Clustering, and Local Public Finance: Evidence from Wal-Mart's Expansion|
|Keywords:||Infrastructure; endogeneity; taxation; Wal-Mart|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
|Depositing User:||Michael Hicks|
|Date Deposited:||03. Oct 2006|
|Last Modified:||13. Feb 2013 09:18|
Bartik, Timothy J. “Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States.” Journal of Business and Economic Statistics, January 1985, 3(1), pp 14-22. Bartik, Timothy J. “Who Benefits from State and Local Economic Development Policies?” Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 1991. Basker, Emek. “Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion” Review of Economics and Statistics, February 2005, 87(1), pp. 174-83. Boyd, David W. “From ‘Mom and Pop’ to Wal-Mart: The Impact of the Consumer Goods Pricing Act of 1975 on the Retail Sector of the United States.” Journal of Economic Issues, March 1997, 31(1), pp. 223-32. Brueckner, J.K. “Strategic Interaction Among Governments: An Overview of Empirical Studies.” International Regional Science Review, 2003, 26, pp. 175-88. Carlino, Gerald A. and Mills, Edwin S. “The Determinants of County Growth.” Journal of Regional Science, February 1987, 27(1), pp. 39-54. Carlino, G.A. and Voith R. “Accounting for Differences in Aggregate State Productivity.” Regional Science and Urban Economics, 1992, 22(4), pp. 597-617. Carlton, Dennis W. “Why Do New Firms Locate Where They Do? An Econometric Model,” in William C. Wheaton, ed., Interregional Movements and Regional Growth. Washington, DC: The Urban Institute, 1979, pp. 13-50. Chandra, Amitabh and Thompson, Eric. “Does Pubic Infrastructure Affect Economic Activity? Evidence from the Rural Interstate Highway System.” Regional Science and Urban Economics, July 2000, 30(4), pp. 457-90. Cho, B-D.; Sohn, J. and Hewings, G.J.D. “Industrial Structural Change in the Korean Economy Between 1975 and 1995: Input-Output Analysis.” Bank of Korea Economic Papers, 2000, 3, pp. 109-36. Deno, Kevin T. “The Effect of Public Capital on U.S. Manufacturing Activity: 1970-1978.” Southern Economic Journal, October 1988, 55(2), pp. 400-11. Dube, Arindrajit and Jacobs, Ken. “Hidden Cost of Wal-Mart Jobs Use of Safety Net Programs by Wal-Mart Workers in California.” Center for Labor Research and Education, Institute of Industrial Relations, University of California, Berkeley, 2004. Dube, Arindrajit; Eidlin, Barry and Lester, Bill. “Impact of Wal-Mart Growth on Earnings throughout the Retail Sector in Urban and Rural Counties.” Working Paper IIRWPS-126-05, Institute of Industrial Relations, 2005. Duffy-Deno, Kevin T. and Eberts, Randall W. “Public Infrastructure and Regional Economic Development: A Simultaneous Equations Approach.” Working Paper 8909, Federal Reserve Bank of Cleveland, August 1989. Eberts, Randall W. “Some Empirical Evidence on the Linkage Between Public Infrastructure and Local Economic Development,” H.W. Herzog Jr. and A.M. Hicks 112 VOLUME 2, NUMBER 2 2006 FEDERAL RESERVE BANK OF ST. LOUIS REGIONAL ECONOMIC DEVELOPMENT Schlottmann, eds., Industry Location and Public Policy. Knoxville, TN: University of Tennessee Press, 1991. Eppli, Mark J. and Benjamin, John D. “The Evolution of Shopping Center Research: A Review and Analysis.” Journal of Real Estate Research, Winter 1994, 9(1), pp. 5-32. Evans, Paul and Karras, Georgios. “Convergence Revisited.” Journal of Monetary Economics, April 1996, 37(2), pp. 249-65. Fox, William F. and Murray, Matthew N. “Local Public Policies and Interregional Business Development.” Southern Economic Journal, October 1990, 57(2), pp. 413-27. Fox, William F. and Porca, Sanela. “Investing in Rural Infrastructure.” International Regional Science Review, January 2001, 24(1), pp. 103-33. Franklin, Andrew W. “The Impact of Wal-Mart Supercenters on Supermarket Concentration in U.S. Metropolitan Areas.” Agribusiness, Winter 2001, 17(1), pp. 105-14. Franzese, Robert and Hays, Jude. “Empirical Modeling Strategies for Spatial Interdependence: Omitted- Variable vs. Simultaneity Biases.” Presented at the 2004 meetings of the Political Methodology Organization Section of the American Political Science Association, 2004. Fujita, Masahisa and Thisse, Jacques-François. “Economics of Agglomeration.” CEPR Discussion Paper 1344, Center for Economic Policy Research, 1996. Garcia-Mila, Teresa and McGuire, Therese J. “The Contribution of Publicly Provided Inputs to States’ Economies.” Regional Science and Urban Economics, June 1992, 22(2), pp. 229-41. Gibson, Lay J.; Albrecht, Bryant and Evans, Barry. “Is Retail Trade a Focus for Real Economic Development in the Knowledge-Based Economy?” Applied Research in Economic Development, 2003, 1(1), pp. 44-55. Global Insight. “The Economic Impact of Wal-Mart.” November 4, 2005; www.globalinsight.com/ MultiClientStudy/MultiClientStudyDetail2438.htm. Gulyani, Sumila. “Effects of Poor Transportation on Lean Production and Industrial Clustering: Evidence from the Indian Auto Industry.” World Development, July 2001, 29(7), pp. 1157-77. Harmatuck, Donald J. “The Influence of Transportation Infrastructure on Economic Development.” Logistics and Transportation Review, March 1996, 32(1), pp. 63-76. Helms, L. Jay. “The Effect of State and Local Taxes on Economic Growth: A Time Series Cross-Section Approach.” Review of Economics and Statistics, November 1985, 67(4), pp. 574-82. Hicks, Michael J. ”The Impact of Appalachian Corridors on Small Business.” Proceedings of Transportation and Economic Development 2002, Transportation Research Board, National Academy of Sciences. TR Circular E-C050, 2002, pp. 1-18. Hicks, Michael J. “Does Wal-Mart Cause an Increase in Medicaid Expenditures?” Center for Business and Economic Research, Marshall University, Regional Economic Review, Fall 2005a. Hicks, Michael J. ”The Impact of Appalachian Corridors on Small Business: Evidence from Corridor G.” Rahall Appalachian Transport Institute, 2005b. Hicks, Michael J. “Estimating Wal-Mart’s Impacts in Maryland: A Test of Identification Strategies and Endogeneity Tests.” Unpublished manuscript, 2006. Hicks, Michael J. and Wilburn, Kristy L. “The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia.” Review of Regional Studies, 2001, 31(3), pp 305-13. Hines, James R. Jr. “Altered States: Taxes and the Location of Foreign Direct Investment in America.” American Economic Review, 1996, 86(5), pp. 1076-94. Holtz-Eakin, Douglas. “Public Sector Capital and the Productivity Puzzle.” Review of Economics and Statistics, February 1994, 76(1), pp. 12-21.