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Entry regulations against big-box retailers have been introduced in many countries to protect smaller independent stores. Using a new dataset from the UK, the author shows that in fact these entry regulations have been associated with greater employment declines in independent stores they were meant to protect. The reason is that when large retail chains are prevented from entering a new area with a big-box store, they typically enter instead using a smaller in-town store format. These smaller format stores compete more directly with independent stores.
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