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Open Access Publications from the University of California

Geographic scope, scale, and local social structure: Survival of chain and independent retailers in California, 1990-2004

  • Author(s): MacGregor, Nydia Marie
  • Advisor(s): Haveman, Heather A.
  • et al.

This dissertation examines the effects of governance structure, size and local social structure on the survival of retail establishments in California between 1990 and 2004. Firstly Chapter Two integrates ideas from economic history, urban studies and the culture of consumption to explain the importance of the retail system in the United States. The chapter paints a picture of a retail system positioned at the intersection of commerce, culture and community. The next chapter, using ideas from organizational ecology, proposes hypotheses to explain the differential survival rates of independent retailers (with a focused geographic scope) and chain retailers (with a broader geographic scope). I also predict the separate effects of firm size from establishment size for each of these categories of retailers. Retailers, however, are not one-dimensional organizations. Other considerations besides geographic scope inform how owners and mangers organize their firms. One of these is product breadth. Chapter Four tests the predictions that when independents also commit to a single product category, they survive longer than single-category chain retailers, multi-category chain retailers, and multi-category independent retailers. Finally, considering the position of independent retailers in their communities, Chapters Four and Five propose that local social and built environments positively influence the survival rates of independent establishments. Independent retailers are likely to be a part of the local social fabric and as such benefit from distinctive local character like urbanness, wealth, and racial and age homogeneity. Additionally, independent retailers participate in local logics of action and thereby benefit from historical urban planning arrangements. The hypotheses are tested with an extensive dataset covering fourteen years of life histories of Californian retailers. My findings indicate that local economic and social factors influence the survival of independent, whereas not for chain stores. The results suggest that the larger the scale of an establishment the longer the survival time for a chain store, but not for an independent. Being a multi-category is of particular importance for independent stores, but not chain stores. The findings also support the hypotheses about local development patterns and the survival of independent retailers. The findings offer important contributions to our understanding of the relationships between the local social structure and organizational survival and the multi-dimensional nature of organizations and their survival.

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