Working Paper No. 1247

Determinants of Economies of Scope in Retail

Published: November 8, 2018, revised August 2019Pages: 61Keywords: Economies of scope; Product variety; Productivity; Inventory; Demand; 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 in retail using a dynamic framework and novel product and store data. We estimate store productivity and consumers’ perceived shopping quality and analyze their relationship with intensive and extensive product margins, performance and welfare. We find that high productivity stores offer more products and sell more of each product. High quality stores offer fewer products
and sell more of top products. Counterfactual experiments show that productivity innovations increase product variety, especially when demand uncertainty is low and in the long run. Higher shopping quality increases consumer surplus even if stores specialize.




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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