Liberalising the domestic retail market


Published 02.01.18

How does the entry of foreign retailers into domestic markets affect welfare? Dave Atkin discusses evidence from Mexico.

Dave Atkin (MIT) puts forth evidence to inform the debate on liberalising domestic retail sectors. In his study, he finds that while the entry of Walmart into Mexico led to the closure of many traditional retailers, these effects were concentrated among few and were, on net, more than offset by the reduction in prices. The aggregate effect found was an overall increase in livelihoods by 6%.