Wednesday, 5 April 2017

What happens when IKEA comes to town?

an article by Sven-Olov Daunfeldt (HUI Research, Stockholm, Sweden) and Oana Mihaescu, Helena Nilsson and Niklas Rudholm (Dalana University, Falun, Sweden) Regional Studies Volume 51 Issue 2 (February 2017)


The effects of a new IKEA store on retail revenues, employment and inflow of purchasing power in the entry municipalities as well as in neighbouring municipalities were investigated using data from 2000–11.

A propensity score-matching method was used to find non-IKEA entry municipalities that were as similar as possible to the entry municipalities based on the situation before entry.

The results indicate that IKEA entry increased entry municipality durable goods revenues by about 20% and employment by about 17%. Only small and, in most cases, statistically insignificant effects were found in neighbouring municipalities.

JEL Classification: D22, L81, R11, R12, R58

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