Determinants of economies of scope in retail

This paper studies the determinants of economies scope and quantifies their impact on extensive intensive product margins in retail. We use a framework based multiproduct technology to model stores’ incentives expand variety. Using novel Swedish data categories stores, we find that high-productivity stores offer more sell products all categories. Stores with high-demand shocks specialize fewer top-selling Policy simulations regional programs target show investment subsidies mentoring support for low-productivity increase number sales per category, especially benefiting rural markets.