THE EFFECTS OF ENTRY REGULATIONS ON MOM AND POPS STORES
Entry regulations against big-box retailers have been introduced in many countries to protect smaller mom-and-pop stores. Using a new dataset from the UK I show that in fact these entry regulations have been associated with greater employment declines in mom-and-pop stores. 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 momand-pop stores. To causally identify this impact I use the changing nature of local political control in the UK from 1993 to 2003. Since local politicians directly control planning regulation in the UK, and political parties have very different views on the ideal amount of planning control, this provides exogenous variation in the ease of entry for big-box retailers.