WalMart and Local Economic Development

Abstract

This article reviews the literature that evaluates WalMart’s impacts on local economies. The authors first describe the methods used to account for potential reverse causality of WalMart’s store location decisions, and then they discuss the literature assessing the company’s effect on three aspects of community life: (a) retail (and nonretail) businesses, across large- and small-sized stores and in different business environments; (b) retail workers, wages, and types of jobs; and (c) producer and consumer welfare through the company’s price-decreasing effect and other potential indirect effects. Last, articles focusing on a broad spectrum of local conditions that could be affected by the company, including poverty rates, social capital, food insecurity, policy effectiveness, and obesity are reviewed. For each dimension, evidence is found of both positive and negative effects, suggesting that we are still far from truly understanding the net effect of WalMart on local economies, let alone the overall consequences in the long run.

The Real Walmart

“…However, disagreement with this contention of ours is offered by some scholars (Bonanno and Goetz ; Lichtenstein ). According to the former: “… articles focusing on a broad spectrum of local conditions that could be affected by the company, including poverty rates, social capital, food insecurity, policy effectiveness, and obesity are reviewed.…”

Backlash against the "Big Box": Local Small Business and Public Opinion toward Business Corporations

“…In short, opponents of absentee-owned chain stores commonly argue that such stores pose the threat of displacing local businesses and undermining the political and economic independence of local communities. Indeed, contemporary research finds that the entry and prevalence of corporate chain stores is associated with declining sales and, consequently, job losses among local small businesses (Basker 2005;Dube, Lester, and Eidlin 2007;Neumark, Zhang, and Ciccarella 2008;Artz and Stone 2012;Bonanno and Goetz 2012;Drewianka and Johnson 2014).…”

“…Despite its pervasiveness, we unfortunately know very little about how this changing retail landscape-and the controversies that come with it-impact public opinion. While significant controversy exists as to the local economic (Goetz and Swaminathan 2006;Artz and Stone 2012;Bonanno and Goetz 2012;Hicks, Keil, and Spector 2012;Drewianka and Johnson 2014) and civic (e.g., Humphries 2001;Hopkins 2004;Goetz and Rupasingha 2006;cf Carden, Courtemanche, and Meiners 2009) impacts of big-box store development, scholarship has yet to address the public opinion research question of whether citizens' attitudes toward corporate big-box establishments, as well as business corporations more generally, are systematically related to the size of the small vis-à-vis large retail business sector in the local area in which they reside.…”

The spread of “big box” retail firms and spatial stratification

“…For instance, does Walmart's founding in county influence poverty or does Walmart select into counties more likely to experience higher poverty? Researchers have tried to deal with this endogeneity issue using various approaches (see Bonanno & Goetz, ). Addressing this issue is important but not merely a statistical task.…”