재래시장의 매출액 증가율 결정요인 분석

Abstract

A traditional market place hosts hundreds of small stores run by self-owned business entrepreneurs and so it provides job opportunities for many people in local area. Also it is an important place because residents meet regularly while shopping and it enriches local culture. But it has faced an abrupt change since the government allowed in early 1990's the large-scale discount stores including foreign ones to do business in the pretext of modernizing retailing industry or yielding to the pressure to open the domestic market by foreign retail giants. A discount store has advantage over a traditional market place in many aspects. It posts lower price over selected manufactured goods and provides a comfortable shopping space to draw customers. In results, the rate of speed that it infiltrated into the retail market has been unprecedented. It inflicts irreversible damage on most of traditional markets. The small stores in a traditional market suffer severely from sales decline and many of them lose business. The government has witnessed the upheaval in retail market and was very concerned with a rapid collapse of traditional market places and ruins of small business owners. Recognizing seriousness of the suffering faced by traditional markets, it instituted a legal act in 2005 to revitalize them and so to prevent small stores from closing business. It also operated a government agency, the center for supporting traditional markets, to implement policies efficiently. As a fiscal measure, the government has poured a vast amount of money in modernizing facilities of a traditional market and in training store owners so they can adopt modern marketing skills. Given these circumstances. the initial studies looked for the reasons for the collapse of a traditional market and proposed recommendations to support it. Shin and Moon (2003) and Kim (2004) are among them. Shin and Moon (2003) pointed natural lighting, ventilation, cooling and heating, sewage system, lack of rest rooms, and limited parking space as examples of inadequate facility. They picked old-fashioned management system, primitive marketing skill, and inactive association of store owners as operation problems. These studies mainly depend on mainly qualitative analysis with survey and interview data to draw policy recommendation. Of course, there are a few quantitative analysis about behavior of the consumer toward traditional market places (Lee 2005; Oh and Lee 2007). Lee (2005) found that aged people over 40's and female are more likely to shop at a traditional market but income level is not a factor that causes a shopper to go to a traditional market. As long as quantitative analysis of the sales of retail industry is concerned, many preceding papers mainly dealt with the large discount stores. They investigated what would determine the sales of a discount store because its information was accessible (Lee 2004; Lee and Cho 2007; Lim and Park 2007). Lee (2004) used a simple regression to explain how various factors influence sales of discount stores. He chose population, the number of household, the number of houses in a neighborhood, regional economic activity, transportation access, competition as external factors. He also considered internal factors such as store space, brand, and parking space. On the other hand, the sales analyses of the traditional market stores have been rare because it is not easy to obtain the sales data of small stores in a traditional market. Fortunately, the center for supporting traditional market has begun to conduct annual survey for more than 3,000 traditional markets across the country beginning in 2006. The survey includes sales information of traditional markets. In facts, there had been no available sales data before the market survey began. For this lack of sales data, until recently there were little empirical studies of how favorably the government support influences the sales growth of a traditional market. Exceptionally, Lim (2008) analyzes an effect of the government financial support on the business of a traditional market with sales data released by the center. He shows it had a positive effect on the sales of traditional markets and the number of customers using DID method. This paper also uses the survey data released by the center to see what determines sales growth of a traditional market. The data includes other detailed informations about traits of a traditional market as well as sales. In addition, we collect the data of business environment in which it is located. They are the number of residents within a certain radius from a traditional market, the number of competitors, and the purchasing power of a local area. We take a SSM(Super supermarket) and a discount store as competitors. That is, we use both internal and external factors that influence the sales of a traditional market. Especially, we take into consideration the government support in determining sales growth. We are concerned with growth of sales, not with sales itself. In other words, we would like to know whether the government support as well as other factors gives positive or negative effects on sale growth. Geographically, we focus on traditional markets in Seoul to analyze how various factors affect sales growth. When we use sales data, there is a problem of accuracy because the sales figure is expressed by the representative of the market, not confirmed by the tax office or an account firm. We apply a model by Blanchard and Kiyotaki (1987) to apply log-demand function. As difference of log sales over two consecutive years is sales growth, the use of sales growth as as dependent variable can mitigate an sales error guessed by the representative. First, we regress difference of log sales on various explanatory variables. Then, we use an ordered probit model to reflect the incompleteness of sales data. It is rational to assume that the representative knows the direction of sales change though not knowing its exact annual sales amount. Therefore, we divide traditional markets in Seoul as three groups, one with growing sales, one with diminishing sales, and one with stagnant sales, and then order them. We estimate both linear sales growth regression and ordered probit. Linear estimation shows that a registered market, a market formed by individually owned stores, and a modernized market by the government support each recorded a positive growth. We can confirm that the effort of government worked. The estimation also shows that the sales of a traditional market grew in neighbor of the town where many old houses are located. But linear regression does not tell whether competitors such as a discount store or SMS has a negative effect on sales growth. We suspect that it would be caused by the incompleteness of sales data. On the other hand, ordered probit model shows that SMS has a negative effect on sales growth but income has a positive effect. Accordingly, ordered probit is better in providing the estimation results that coincide with our expectation.