Transportation And Infrastructure, Retail Clustering, And Local Public Finance: Evidence From Wal-mart's Expansion

The author examines the role highway infrastructure and local property tax rate variability play in retail agglomeration in Indiana from 1988 through 2003. To account for data errors and the potential endogeneity of taxes and infrastructure on retail agglomeration, the author introduces a unique identification strategy that exploits the entrance timing and location of Wal-Mart stores in Indiana. Using a time-series cross-sectional model of Indiana's 92 counties from 1988 through 2003, the author estimates the impact highway infrastructure, property taxes, and big-box competition have in creating regional agglomerations.