Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry

Abstract

Are product market and entry regulation key sources of low employment growth in many European countries? We investigate this question in the context of the French retail trade industry. Since 1974, approval by regional zoning boards has been required for the creation or extension of any large retain store in France. We exploit a unique database that provides time- and region-specific variation in boards' approval decisions. We show that stronger deterrence of entry by the boards increased retailer concentration and slowed down employment growth in France.