This paper examines the impact of Wal-Mart has on local zip code level retail trade businesses. We test our model against small medium and large retail firms and we find that Wal-Mart actually improves the retail trade sector in zip codes that it locates in rather than destroying all existing retailers. The scrutiny that Wal-Mart faces is largely due to the fact that they are so efficient in the way they do business that many other retailers cannot compete. However, there are proponents on each side of this argument that have made the topic of Wal-Mart very divisive. In the academic field, competing views are expressed and likewise when a Wal-Mart chooses to enter a community, the entire population is immediately split in determining if this will be beneficial to the local economy. Despite the vast amount of research and data on Wal- Mart, there is no clear consensus on the economic impact of Wal-Mart. This debate has reached lawmakers and policy makers as we have seen laws being made that are strategically created to prevent the entrance of a Wal-Mart as well as policies that promote the entrance of a Wal-Mart. Moreover, much of the research in this field is done at too large of a scope to actually provide city residents, business owners and lawmakers a reliable way to evaluate how a Wal-Mart will impact their communities. My research will discern the economic implications that face incumbent retail and service firms in cities that Wal-Mart has located in and the implications for future growth for local retail firms to benefit contrary to popular belief. By evaluating the effects the entrance of a Wal-Mart has on the formation of agglomeration economies in retail in order to provide a more conclusive action plan for city policy makers to understand.


Burnell, Barbara

Second Advisor

Burnell, James


Business Economics


Organizational Behavior and Theory | Sales and Merchandising


Wal-Mart, retail trade, discount retailers, local economic development, micropolitan

Publication Date


Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis



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