Estimating the Impact of E-Commerce on Retail Exit and Entry Using Google Trends

Abstract

I address the degree to which variation in exposure to e-commerce is associated with entry and exit in the retail industry at the county level. To measure exposure to e-commmerce, I rely on within-state variation in relative search frequency for the phrase “amazon prime” as reported by Google Trends. To generate exogenous variation in this e-commerce exposure measure, I use within state variation in the relative search frequency for “porn” and “cat videos”. FEIV estimates suggest at least 10 of the 27 retail industry groups experience net exit with increasing e-commerce exposure, while at least 6 experience net entry. Future work investigating the mechanisms generating this heterogeneity will be fruitful.