Research Insights: What Are the Welfare Effects of Large Firms Crowding Out Microenterprises?
Peer Reviewed
Date issued
Oct 2024
Subject
Income Distribution;
Small Business Growth;
Productivity Growth;
Household Income;
Social Welfare;
Small Business;
Retail;
Wage;
Industry;
Forced Migration;
Informal Credit;
Debtor Finance
JEL code
D22 - Firm Behavior: Empirical Analysis;
L22 - Firm Organization and Market Structure;
O12 - Microeconomic Analyses of Economic Development;
L10 - Market Structure, Firm Strategy, and Market Performance: General
Country
Mexico
Category
Catalogs and Brochures
The entry of convenience chains in Mexico has reduced the number of neighborhood shops by 15%. Median and average consumers benefit from chains entry, with an average welfare gain of 0.5%. Lower-income households may be worse off due to chains replacing neighborhood shops.
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