Doctor of Economics, Professor, Rector of Kyiv National University of Trade and Economics
CREATION OF INSTITUTES BY MODERN RETAIL CHAINS
Background. Considering the ability of institutional environment to determine the activity of economic entities and its results, there is a logical tendency of such entities to establish the control over the system of institutional environment forming factors – the tendency of private institutes’ creation.
Review of scientific sources. J. K. Galbraith, D. North, E. Toffler, A. Gerasymenko, V. Dement’ev have written about creation of institutes by business, and by big business in particular, while the specific nature of the trade, which is an infrastructural sector that determines proportions of commodity exchange in the economy, and the absence of adequate public institutes in this sector need its deeper investigations and the focus on the creation of institutes by modern retail chains.
The aim of the research is to find out the sources, ways and results of institutes’ creation in Ukrainian retail trade, to assess its impact onto the proportion of commodity exchange and the competition in the trade sector.
Materials and methods. To reach this aim methods of institutional analysis, induction and deduction, comparison, analytical grouping and statistical analysis, content analysis of contracts between retail trade operators and their counteragents etc. were used in the article.
Results. The main institutes’ creators in Ukrainian trade sector are big retail chains of hyper- and supermarkets. They create rules for the whole sector, establish traditions and patterns of competition behavior at the three levels: ‘hyper-, supermarkets and consumers’, ‘hyper-, supermarkets and suppliers’, and ‘hyper-, supermarkets and competitors’ that let them maximize profit in the short- and long-run.
Conclusion. Information asymmetry is a factor that determines the dominant position of modern retail chains. It lets retailers find and fill in the informational vacuum in the sector, created because of the quick development of the latter. It leads to creation of institutional trap, which mission is to exploit the disproportions of market power breakdown on behalf of strong retail chains. The overcoming of this trap by the market forces is impossible. It needs consistent state regulation.
Keywords: institute, creation of institutes, trade, retail chains, customers, competitors, suppliers, market power.
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