Last updated on May 26, 2014
In an article that has one of the coolest titles I have seen so far this year –“From Beijing to Bentonville: Do Multinational Retailers Link Markets?” — Keith Head and his coauthors explore whether the presence of stores like Walmart and Carrefour in Chinese cities have led to more export activities in those cities, and they find that indeed it did. Here is their abstract:
Four of the world’s five largest retailers–Walmart, Carrefour, Tesco, and Metro–entered China after 1995, following new policies that allowed foreign retailers to participate more fully in the Chinese retail market. As each retailer added both stores and global procurement centers, they created unique footprints that caused Chinese cities to be differentially exposed to the activities of these global retailers. We exploit these differences to identify the effect of multinational retailer presence on city-country exports of retail goods. We find robust evidence that increased exposure to multinational retailers was followed by rising exports. Since the export expansions are not limited to the connections formed by the retailers’ bilateral networks, our evidence suggests that the growing presence of global retailers operated, at least in part, by enhancing the general export capabilities of the affected cities.
In case you don’t know who Keith Head is, he is a professor at the UBC business school, and he wrote about the introduction formula a while back, and which Tim Beatty and I teach our second-year PhD students in the qualifying paper seminar.
Alchemy for Academics
If you are not familiar with the introduction formula, it states that the introduction to an economics paper should follow the following formula: hook-research question-antecedents-contribution-roadmap.
(Re)discovering that formula* made writing my own introductions much less painful (and enjoyable, even), and given the importance of writing solid introductions, I cannot emphasize just how useful it is. In terms of writing, the introduction formula turns lead into gold. Is it formulaic? Sure. But it works, and you can still remain creative within the confines of that formula.
* I say “rediscovering” because the first time I came across the formula, either late during my time in grad school or early in my career, I didn’t think I needed it. How foolish I was.