Working Paper No. 1247

Determinants of Economies of Scope in Retail

Published: November 8, 2018, revised August 2019, July 2020 and December 2020Pages: 65Keywords: Economies of scope; Productivity; Retail; Product variety; Technology; CompetitionJEL-codes: L11; L13; L25; L81; M21

Determinants of Economies of Scope in Retail Florin Maican and Matilda Orth

This paper studies the determinants of economies of scope and quantifies their impact on the extensive and intensive product margins in retail. We use a framework based on a multiproduct technology to model stores’ incentives to expand product variety. Using novel Swedish data on product categories and stores, we find that high-productivity stores offer more product categories and sell more products of all categories. Stores with high-demand shocks specialize in fewer product categories and sell more products of top-selling categories. Policy simulations of regional programs that target the determinants of economies of scope show that investment subsidies and mentoring support for low-productivity stores increase the number of product categories and sales per product category, especially benefiting stores in rural markets.



Matilda Orth


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Florin Maican


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Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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