Retail services efficiency: impact of country-specific factors

Abstract

Purpose Efficiency in retailing companies is mandatory for survival. Literature acknowledges external factors impact on efficiency. However, this impact remains understudied, as previous research typically focuses on managerial decisions. The purpose of this paper is to partially fill this gap by exploring the influence of external factors on retailers’ efficiency. Design/methodology/approach This research simultaneously measures retail efficiency and evaluates the impact of six potential drivers by applying bootstrap techniques in a sample of 25 European Union countries during the period 2006–2015. Findings The efficiency of the retail system in the countries under analysis evolves at different paces during the observation period. This evolution can be explained by country population density, average store size within countries, foreign trade ratio, concentration, economic freedom and percentage of urban population. Research limitations/implications This research does not account for supply and demand restrictions that might affect retailers’ efficiency, as well as other variables that influence their production process. Practical implications This paper might help retail managers to comprehend and manage their companies’ efficiency. Furthermore, it provides clues to evaluate market attractiveness in retailers’ international expansion strategies. Social implications Policy makers can facilitate retailers’ efficiency through regulations on external variables that influence retailers’ performance, namely economic freedom and foreign trade ratio. Originality/value For the first time, this study analyses the impact of external factors on retail services efficiency across countries.