Abstract

The purpose of this paper is to analyse the influence of related and unrelated industry diversity on retail firm failure with a focus on Swedish retailers. The paper develops competing hypotheses from organizational theory and the economics of agglomeration concerning the survival chances of retail firms located in geographic proximity. Hypotheses are tested using a hazard model and a sample of 48,953 retail firms observed during 2002-2010. Key findings show that increases in the local share of similar retail firms is positively related to the risk of failure while there is a negative relation between increases in local industry diversity and the risk of failure. These results indicate that knowledge transfer from a diverse set of industries are important in lowering the failure risk. Differentiating among small and specialized retail firms indicate that there is significant intra-industry heterogeneity in the influence of local industrial composition on the likelihood of failure. (C) 2015 Elsevier Ltd. All rights reserved.

Keywords

Firm failure; Retail; Hazard model; Industry diversity

Published in

Journal of Retailing and Consumer Services
2016, Volume: 28, pages: 219-227

UKÄ Subject classification

Business Administration


Publication identifier

DOI: https://doi.org/10.1016/j.jretconser.2015.09.006

Permanent link to this page (URI)

https://res.slu.se/id/publ/114087