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Cited by 445

The DOI matches its Crossref record; 20 of the 20 references it cites were found in a registry or an index.

The Diffusion of Wal-Mart and Economies of Density

Open access
·2011·Econometrica

Abstract

The rollout of Wal-Mart store openings followed a pattern that radiated from the center outward, with Wal-Mart maintaining high store density and a contiguous store network all along the way. This paper estimates the benefits of such a strategy to Wal-Mart, focusing on the savings in distribution costs afforded by a dense network of stores. The paper takes a revealed preference approach, inferring the magnitude of density economies from how much sales cannibalization of closely packed stores Wal-Mart is willing to suffer to achieve density economies. The model is dynamic with rich geographic detail on the locations of stores and distribution centers. Given the enormous number of possible combinations of store-opening sequences, it is difficult to directly solve Wal-Mart's problem, making conventional approaches infeasible. The moment inequality approach is used instead and works well. The estimates show the benefits to Wal-Mart of high store density are substantial and likely extend significantly beyond savings in trucking costs.

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Crossref · 10.3982/ecta7699

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Metadata

Venue
Econometrica
Published
2011
Volume
79
Issue
1
Pages
253-302
ISSN
0012-9682 (ISSN-L)
OpenAlex
W3121864791
Cited by
445
References
20
FWCI
88.54
Type
journal article
Language
en
Open access
bronze

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CoChat. (2026). Citation check: The Diffusion of Wal-Mart and Economies of Density. https://app.cochat.ai/papers/10.3982/ecta7699
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The Diffusion of Wal-Mart and Economies of Density. (2011). Econometrica. https://doi.org/10.3982/ecta7699

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