Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:134:\"Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:151:\"Declaration of views_handler_filter_term_node_tid::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:131:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/taxonomy/views_handler_filter_term_node_tid.inc\";s:5:\"%line\";i:303;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:154:\"Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:126:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter_boolean_operator.inc\";s:5:\"%line\";i:149;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:148:\"Declaration of views_handler_filter_node_status::operator_form() should be compatible with views_handler_filter::operator_form(&$form, &$form_state)\";s:5:\"%file\";s:125:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/node/views_handler_filter_node_status.inc\";s:5:\"%line\";i:14;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:126:\"Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://w3ww.cfsp.org/publications/working-papers/supplier-responses-wal-marts-invasion-mexico', '', '144.76.186.38', 1602241462) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128
Supplier Responses to Wal-Mart's Invasion in Mexico | CFSP | Consortium on Financial Systems and Poverty

Supplier Responses to Wal-Mart's Invasion in Mexico

James Tybout
Leonardo Iacovone
Beata Javorcik
Wolfgang Keller
Publication Type: 
Working Papers
Publication Year: 
2011

This paper examines the effect of Wal-Mart’s entry into Mexico on Mexican manufacturers of consumer goods. Guided by firm interviews that suggested substantial heterogeneity across firms in how they responded to Wal-Mart’s entry, we develop a dynamic industry model in which firms decide whether to sell their products through Walmex (short for Wal-Mart de Mexico), or use traditional retailers. Walmex provides access to a larger market, but it puts continuous pressure on its suppliers to improve their product’s appeal, and it forces them to accept relatively low prices relative to product appeal. Simulations of the model show that the arrival of Walmex separates potential suppliers into two groups. Those with relatively high-appeal products choose Walmex as their retailer, whereas those with lower appeal products do not. For the industry as a whole, the model predicts that the associated market share reallocations, adjustments in innovative effort, and exit patterns increase productivity and the rate of innovation. These predictions accord well with the results from our firm interviews. The model’s predictions are also supported by establishment-level panel data that characterize Mexican producers’ domestic sales, investments, and productivity gains in regions with differing levels of Walmex presence during the years 1994 to 2002.

This paper was presented at the Financial Systems, Industrial Organization, and Economic Development Workshop in April of 2012. The corresponding presentation and discussion are also available.

Region: 
Latin America/Caribbean
Country: 
Mexico
Topic: 
Industrial Organization
Topic: 
Economic Modeling
Topic: 
Econometrics and Statistical Methods
Topic: 
Enterprise