The impact of big-boxes on local retail : What happens when IKEA comes to town?

The development of large discount retailers, or big-boxes as they are sometimes referred to, are often subject to heated debate and their entry on a market is greeted with either great enthusiasm or dread. For instance, the world’s largest retailer Wal-Mart (Forbes 2014) has a number of anti- and pro-groups dedicated to its being and the event of a Wal-Mart entry tends to be met with protests and campaigns (Decamme 2013) but also welcomed by, for instance, consumers (Davis & DeBonis 2013). Also in Sweden, the entry of a big box is a hot topic and before IKEA’s opening i Borlänge 2013, the first in Sweden in more than five years, great expectations were mixed with worry (Västerbottens-Kuriren 2011).The presence of large scale discount retailers is not, however, a novel phenomenon but a part of a long-term change in retailing that has taken place globally over the past couple of decades (Taylor & Smalling, 2005). As noted by Dawson (2006), the trend in Europe has over the past few decades gone towards an increasing concentration of large firms along with a decrease of smaller firms.This trend is also detectable in the Swedish retail industry. Over the past decade, the retailing industry in Sweden has increased by around 190 Billion SEK, and its share of GDP has risen from 2,7% to 2,9%, while the number of employees have increased from 200 000 to 250 000 (HUI 2013). This growth, however, has not been distributed evenly but rather it has been oriented mainly towards out-of-town retail clusters. Parallel to this development, the number of large retailers has risen at the expense of market shares of smaller independent firms (Rämme et al 2010). Thereby, the presence of large scale retailers is simply part of a changing retail landscape.The effects of this development, where large scale retailing agents relocate shopping to out-of-town shopping areas, have been heavily debated. On the one hand, the big-boxes are accused of displacing independent small retail businesses in the city-centers and the residential areas, resulting in, to some extent, reduced employment opportunities and less availability for the consumers - especially the elderly (Ljungberg et al 2006). In addition, as access to shopping now tends to require some sort of a motorized vehicle, environmental aspects to the discussion have emerged. Ultimately these types of concerns have resulted in calls for regulations against this development (Olsson 2010). On the other hand, the proponents of the new shopping landscape argue that this evolution implies productivity gains, the benefits of lower prices and an increased variety of products (Maican & Orth 2012). Moreover it is argued that it leads to, for instance, better services (such as longer opening hours) and a creative destruction transformation pressure on retailers, which brings about a renewal of city-centerIIretail and services, increasing their attractivity (Bergström 2010). The belief in benefits of a big box entry can be exemplified by the attractivity of IKEA, and the fact that municipalities are prepared to commit to expenses amounting up to hundreds of millions in order to attract the entry of this big-box. Borlänge municipality, for instance, agreed to expenses of about 350 million SEK in order to secure the entry of IKEA, which opened in 2013 (Blomgren 2009).Against this backdrop, the overall effects of large discount retailers become important: Are the economic benefits enough to warrant subsidies or are there, on the contrary, some very compelling grounds for regulations against these types of establishments? In other words; how is overall retail in a region where a store like IKEA enters affected? And how are local retail firms affected?In order to answer these questions, the purpose of this thesis is to study how entry of a big-box retailer affects the entry region. The object of this study is IKEA - one of the world’s largest retailers, with 345 stores, active in over 40 countries and with profits of about 3.3 billion (IKEA 2013; IKEA 2014). By studying the effects of IKEA-entry, both on an aggregated level and on firm level, this thesis intends to find indications of how large discount retail establishments in general can be expected to affect the economic development both in a region overall, but also on the local firm level, something which is of interest to both policymakers as well as the retailing industry in general.The first paper examines the effects of IKEA on retail revenues and employment in the municipalities that IKEA chose to enter between 2000 and 2011; Gothenburg, Haparanda, Kalmar and Karlstad. By means of a matching method we first identify non-entry municipalities that have a similar probability of IKEA entry as the true entry municipalities. Then, using these non-entry municipalities as a control group, the causal effects of IKEA entry can be estimated using a treatment-control approach. We also extend the analysis to examine the spatial impact of IKEA by estimating the effects on retail in neighboring municipalities. It is found that a new IKEA store increases revenues in durable goods trade with 20% in the entry municipality and the number of employees with 17%. Only small, and in most cases statistically insignificant, negative effects were found in neighboring municipalities.It appears that there is a positive net effect on durables retail sales and employment in the entry municipality. However, the analysis is based on data on an aggregated municipality level and thereby it remains unclear if and how the effects vary within the entry municipalities. In addition, the data used in the first study includes the sales and employment of IKEA itself, which could account for the majority of the increases in employment and retail. Thereby the potential spillover effects on incumbent retailers in the entry municipalities cannot be discerned in the first study.IIITo examine effects of IKEA entry on incumbent retail firms, the second paper in this thesis analyses how IKEA entry affects the revenues and employment of local retail firms in three municipalities; Haparanda, Kalmar and Karlstad, which experienced entry by IKEA between 2000 and 2010. In this second study, we exclude Gothenburg due to the fact that big-box entry appears to have weaker effects in metropolitan areas (as indicated by Artz & Stone 2006). By excluding Gothenburg we aim to reduce the geographical heterogeneity in our study. We obtain control municipalities that are as similar as possible to the three entry municipalities using the same method as in the previous study, but including a slightly different set of variables in the selection equation. Using similar retail firms in the control municipalities as our comparison group, we estimate the impact of IKEA entry on revenues and employment for retail firms located at varying distances from the IKEA entry site.The results generated in this study imply that entry by IKEA increases revenues in incumbent retail firms by, on average, 11% in the entry municipalities. In addition, we do not find any significant impact on retail revenues in the city centers of the entry municipalities. However, we do find that retail firms within 1 km of the IKEA experience increases in revenues of about 26%, which indicates large spillover effects in the area nearby the entry site. As expected, this impact decreases as we expand the buffer zone: firms located between 0-2 km experiences a 14% increase and firms in 2-5 km experiences an increase of 10%. We do not find any significant impacts on retail employment.

Thermal Performance of a Solarus CPC-Thermal Collector

The  aim  of  this  master  thesis  is  an  investigation  of  the  thermal  performance  of  a  thermal compound parabolic concentrating (CPC) collector from Solarus. The collector consists of two troughs with absorbers which are coated with different types of paint with  unknown  properties.  The  lower  and  upper  trough  of  the  collector  have  been  tested individually. In  order  to  accomplish  the  performance  of  the  two  collectors,  a  thorough  literature  study  in  the  fields  of  CPC  technology,  various  test  methods,  test  standards  for  solar thermal  collectors  as  well  as  the  latest  articles  relating  on  the  subject  were  carried  out. In addition, the set‐up of the thermal test rig was part of the thesis as well. The thermal  performance  was  tested  according  to  the  steady  state  test  method  as  described in the European standard 12975‐2. Furthermore, the thermal performance of  a  conventional  flat  plate  collector  was  carried  out  for  verification  of  the  test  method. The  CPC‐Thermal  collector  from  Solarus  was  tested  in  2013  and  the  results  showed  four  times  higher  values  of  the  heat  loss  coefficient  UL (8.4  W/m²K)  than  what  has been reported for a commercial collector from Solarus. This value was assumed to be too large and it was assumed that the large value was a result of the test method used that time. Therefore, another aim was the comparison of the results achieved in this work with the results from the tests performed in 2013. The results of the thermal performance showed that the optical efficiency of the lower trough of the CPC‐T collector is 77±5% and the corresponding heat loss coefficient UL 4.84±0.20  W/m²K.  The  upper  trough  achieved  an  optical  efficiency  of  75±6  %  and  a  heat loss coefficient UL of 6.45±0.27 W/m²K. The results of the heat loss coefficients  are  valid  for  temperature  intervals  between  20°C  and  80°C.  The  different  absorber paintings have a significant impact on the results, the lower trough performs overall better.  The  results  achieved  in  this  thesis  show  lower  heat  loss  coefficients UL and higher optical efficiencies compared to the results from 2013. 

An analysis of linkage between foreign direct investment and GDP per Capita in Pakistan : A time series analysis

This study aims to investigate the relation between foreign direct investment (FDI) and per capita gross domestic product (GDP) in Pakistan. The study is based on a basic Cobb-Douglas production function. Population over age 15 to 64 is used as a proxy for labor in the investigation. The other variables used are gross capital formation, technological gap and a dummy variable measuring among other things political stability. We find positive correlation between GDP per capita in Pakistan and two variables, FDI and population over age 15 to 64. The GDP gap (gap between GDP of USA and GDP of Pakistan) is negatively correlated with GDP per capita as expected. Political instability, economic crisis, wars and polarization in the society have no significant impact on GDP per capita in the long run.

Microstructural, Mechanical and Tribological Characterisation of CVD and PVD Coatings for Metal Cutting Applications

The present thesis focuses on characterisation of microstructure and the resulting mechanical and tribological properties of CVD and PVD coatings used in metal cutting applications. These thin and hard coatings are designed to improve the tribological performance of cutting tools which in metal cutting operations may result in improved cutting performance, lower energy consumption, lower production costs and lower impact on the environment.  In order to increase the understanding of the tribological behaviour of the coating systems a number of friction and wear tests have been performed and evaluated by post-test microscopy and surface analysis. Much of the work has focused on coating cohesive and adhesive strength, surface fatigue resistance, abrasive wear resistance and friction and wear behaviour under sliding contact and metal cutting conditions. The results show that the CVD deposition of accurate crystallographic phases, e.g. α-Al2O3 rather than κ-Al2O3, textures and multilayer structures can increase the wear resistance of Al2O3. However, the characteristics of the interfaces, e.g. topography as well as interfacial porosity, have a strong impact on coating adhesion and consequently on the resulting properties.  Through the deposition of well designed bonding and template layer structures the above problems may be eliminated. Also, the presence of macro-particles in PVD coatings may have a significant impact on the interfacial adhesive strength, increasing the tendency to coating spalling and lowering the surface fatigue resistance, as well as increasing the friction in sliding contacts. Finally, the CVD-Al2O3 coating topography influences the contact conditions in sliding as well as in metal cutting. In summary, the work illuminates the importance of understanding the relationships between deposition process parameters, composition and microstructure, resulting properties and tribological performance of CVD and PVD coatings and how this knowledge can be used to develop the coating materials of tomorrow.

Review of the effectiveness of vehicle activated signs

This paper reviews the effectiveness of vehicle activated signs. Vehicle activated signs are being reportedly used in recent years to display dynamic information to road users on an individual basis in order to give a warning or inform about a specific event. Vehicle activated signs are triggered individually by vehicles when a certain criteria is met. An example of such criteria is to trigger a speed limit sign when the driver exceeds a pre-set threshold speed. The preset threshold is usually set to a constant value which is often equal, or relative, to the speed limit on a particular road segment. This review examines in detail the basis for the configuration of the existing sign types in previous studies and explores the relation between the configuration of the sign and their impact on driver behavior and sign efficiency. Most of previous studies showed that these signs have significant impact on driver behavior, traffic safety and traffic efficiency. In most cases the signs deployed have yielded reductions in mean speeds, in speed variation and in longer headways. However most experiments reported within the area were performed with the signs set to a certain static configuration within applicable conditions. Since some of the aforementioned factors are dynamic in nature, it is felt that the configurations of these signs were thus not carefully considered by previous researchers and there is no clear statement in the previous studies describing the relationship between the trigger value and its consequences under different conditions. Bearing in mind that different designs of vehicle activated signs can give a different impact under certain conditions of road, traffic and weather conditions the current work suggests that variable speed thresholds should be considered instead.