Handbook on the Economics of Retailing and Distribution
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Handbook on the Economics of Retailing and Distribution

Edited by Emek Basker

This Handbook explores and critically examines current research in economics and marketing science on key economic issues in retailing and distribution. Providing a rich perspective for the discussion of public policy, contributions from several disciplines and continents range from the history of chains and the impact of multinational retailers on international trade patterns; to the US merger policy in the retail context, the rise of the Internet and consumer-to-consumer sales. This state-of-the-art Handbook is an essential reference for students and academics of economics and marketing science and offers outsiders valuable perspectives on operations research, data analytics, geography, and sociology.
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Chapter 7: Retailing and international trade

Horst Raff and Nicolas Schmitt


This chapter first discusses the increasing importance of retailers in international trade and then reviews the literature on two main points. The first point is that trade liberalization may induce manufacturers and retailers to adopt vertical contractual arrangements that soften price competition. As a result, the impact of trade liberalization on the volume of trade and social welfare may be smaller or even negative compared to the case where these contractual arrangements are held constant. The second point is that trade liberalization may affect the structure of the retail industry and may therefore contribute to explaining observed changes in retailing, including the increase in market concentration, changes in the size distribution of retail firms, the rise in retailers’ assortments, and even the use of upfront payments by manufacturers, such as slotting allowances, to gain access to retail shelves. We conclude by discussing some directions for future research.

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