Limited Location Options: Measuring Spatial Interactions among Retailers Under Zoning Restrictions

Abstract

This article presents an innovative approach to study spatial interactions among firms under zoning restrictions. For this purpose, we extend a measure of bivariate spatial association to explicitly account for limited location options as well as spatial dependence. The statistic is applied to study spatial location patterns of firms in the pharmacies and drugstores industry in three different cities using precise location and zoning data. We find that failing to account for zoning can lead to spurious findings. The results suggest that while consumers may perceive that pharmacies are often located next to each other, when accounting for zoning firms locate independently given their restricted location choices.

Famous Chinese Traditional Dishes: Spatial Diffusion of Roast Duck in Mainland China and Spatial Association Characteristics of Chain Stores

“…On the other hand, both can also increase their market share by being close to each other and thus gain more profits [30]. Currently and in real life, besides the voluntary proximity of the two enterprises, there is also a policy influence where the controlling plan constrains the land class attributes, which also further promotes the mutual proximity of the two enterprises [31]. With the advent of the era of big data, the study of business competition has also entered a new stage, and currently, for the spatial association relationship between competing firms, some scholars think from the perspective of consumers, and Hideo argues that more concentrated firms or stores can attract more consumers with different tastes [32], while leading to intense price competition and producing a price reduction effect, in addition to the fact that the clustering of firms can largely.…”