Spillover effects of a mega shopping complex on pre-existing,small retail shops over space,over time and across retail types

This paper studies spillover effects from Starfield, a mega shopping complex in South Korea, to pre-existing, small retail shops over space, over time and across types of retail shops. Using the data on daily store traffics, we test for any complementarity or substitutability from Starfield to neighboring retail shops. Our analysis shows that spillover effects of Starfield on neighboring retail shops are equivocal in the short run. During the first year of the opening of Starfield, the contemporary effect (or the short-lived effect, lasting a single day) of Starfield is negative for consumer goods stores and personal service shops outside the 3-km radius, while it is positive for restaurants and bars within the 5-km radius. After that first year has passed, only the positive contemporary effect on restaurants and bars survives, and the cumulative effect (or the longer-lasting effect) turns significantly positive for consumer goods stores within 1.5 km of Starfield and personal service shops in the 1.5-to-3-kilometer radius. Our analysis estimates the temporal path of spillover effects—both contemporary and cumulative effects—from a newly-built mega shopping complex to neighboring retail shops, which is a novel contribution to the retail literature.