Developments in Retail Trade Regulation in Spain and Their Macroeconomic Implications

Abstract

There is evidence that retail trade regulations may have a signifi cant impact on prices, employment and productivity. In the case of Spain, the retail trade sector is subject to a wide ranging set of regional regulations. This paper provides a database and a set of indicators on the main restrictions to retail trade in place in Spain's Autonomous Regions (Comunidades Autónomas) between 1997 and 2007. The restrictions bear on the following regulatory aspects: shop opening hours, seasonal sales, defi nitions of large retail outlets, regional licensing of hard discount stores, moratoria in retail trade licence issuance and specifi c taxes on large retail outlets. The paper next presents an aggregate indicator constructed on the basis of these restrictions using factor analysis. Lastly, using data panel techniques, this paper provides estimates of the effect of trade restrictiveness (using the aggregate indicator) on commercial density, the employment in the sector and the rate of infl ation in each region.The results of this research point to an increase in the level of regulation over the course of the period. Further, there is evidence that greater regulation may be associated with higher infl ation, lower employment in the sector and greater commercial density. In any event, these results should be viewed with caution given the necessary limitations of the regulation indicator used and the limited data period available.

Small Shops for Sale! The Effects of Big-Box Openings on Grocery Stores

“…Between 1985 and the mid-1990s, Spain experienced a change in its market structure with the complete international liberalisation of the retail sector, affecting above all the food retail trade (Matea and Mora-Sanguinetti, 2009, show an increase in restrictiveness from the late 1990s with respect to the previous decade). Thus, a market that had previously been dominated by grocery stores saw the arrival of the supermarket, most belonging to foreign chains.…”

“…The number of traditional stores is used to identify the effects of big-box openings on grocery store closures. According to the literature (for example,Bertrand and Kramarz, 2002) and anecdotal evidence from local planners in Spain (provided byMatea and Mora-Sanguinetti, 2009), four years would appear to be the plausible, average time lag between applying for a licence to build a big-box store and itseventual opening. This means the effects of the 1997 regional regulation would not make themselves manifest until 2001 and so the period of analysis should start in 2001.…”