The Impact of Mega Shopping Complexes on the Survival of Nearby Local Businesses: A Case Study of the Seoul Metropolitan Area, South Korea

Abstract

This study examines the impact of mega shopping complexes (MSCs) on the survival of adjacent businesses in the Seoul Metropolitan Area (SMA), South Korea, from 2008 to 2023. Using mixed-effects Cox models, we analyzed three prevalent industrial sectors in commercial districts: food service, beauty, and recreation businesses. We found that MSC affects local businesses differently, depending on the services they offer. In food service businesses, only pubs face the risk of business failure due to the entry of MSC. Conversely, general restaurants, cafés, and beauty businesses showed no significant statistical impact. Recreation businesses are divided into two types based on the similarity of their services to those offered by MSC. After MSC entry, close proximity to the MSC yields a negative effect on establishments offering similar services, while benefiting those offering distinct services. This finding suggests that policies should focus more on enhancing the competitiveness of local businesses to effectively utilize the increased visibility rather than solely limiting the spillover effect of the MSC.