Quantifying possible inefﬁciencies stemming from regulation is important to both policymakers and researchers. We use a dynamic structural model to evaluate the role of local market entry regulations in the productivity of retail trade. Our model is ﬂexible with respect to how local market regulations inﬂuence store productivity and controls for demand in local markets. We combine the structural approach with detailed data on all stores in the Swedish retail industry. The results show that more liberal entry regulations increase future productivity and that the increase in productivity is larger for small stores and small markets than for large stores and large markets.
International Journal of Industrial Organization
A Dynamic Analysis of Entry Regulations and Productivity in Retail Trade