The density of retailers in Malaysia

Abstract

The predictability of factors discussed under the Social Optimality Model by Flath and Nariu (1996) in explaining the density of retailers in Malaysia are explored. The empirical result shows that except for population density, all factors are in accord with the predictions of the model. In addition, the factors that led to a decline in the number of small-scale retailers and expansion of large-scale retailers are explored, and the study concludes with policies to deal with this phenomenon.

Keywords:

• decline of small-scale retailers
• expansion of large-scale retailers
• Malaysia
• regression
• retail density
• social optimality model

Acknowledgements

I am grateful to Yumoto Yuji, Yukimoto Tadashi and Marc Bremer for their very helpful comments and advice.

Notes

1. The Klang Valley lies entirely in the state of Selangor and covers the Federal Territory of Kuala Lumpur and the six districts of Petaling, Klang, Gombak, Ulu Langat, Kuala Langat and Sepang.

2. The author thanks an anonymous referee for additional historical insights concerning immigration by Chinese and Indians: ‘Many Indians were brought to Malaya to serve in the army, police and administration. It was mainly southern Indians who worked in the plantations…Most Chinese immigrants came of their own accord often working for Chinese run companies’.

3. The ‘bumiputra’ or son of the soil is generally referred to the ‘Malays’ and ‘natives’ in Sabah and Sarawak.

4. An economic development plan for five year period implemented by the government of Malaysia.

5. A collection of stalls where vendors sell fresh produce, often including stalls selling freshly cooked foods. Usually open-air facilities.