An Empirical Evaluation of the Large Store Act

Abstract

The aim of this paper is to empirically evaluate the outcome of the Large Store Act. The Act has been locked into Japanese retail industry from 1974 to now and has controlled the location of large stores and their size in order to protect business of small or medium shops. But the policy outcome of the Act should be evaluated by statistical evidences. This paper tries to calibrate the policy effects of the Act with time series data and cross-section spatial data. The empirical evidences show us that the Large Store Act fails to perform the objectives in the long run. The main reason is illustrated by the continuously decreasing of the number of small or medium shops, and second reason is focused the low financial performances of large retail firms. The act may force almost commercial areas to be deteriorate. The lesson should be utilized when we demand new retail policy to modify the confused situation.