Many rural districts are facing economic decline because of a range of factors such as demographic change, changing socio-economic development patterns, farm amalgamations, the entry of large retail businesses, the so called ‘Big Box Retailing’ (BBRs), and a decline in rural infrastructure investment. These factors in turn affect the viability of many small-to-medium sized enterprises (SMEs), which are the primary employers and the engines for economic growth and employment in rural districts. The combined effect of these processes is that many rural districts struggle to keep young people, maintain economic and social diversity and attract new settlers and investment. This thesis seeks to answer the question as to how large scale retail businesses, rural farm amalgamations and declining rural populations impact on the viability of SME retail businesses in rural areas. In order to answer this question, this study identifies the key factors, which affect the future viability of small-to-medium sized retail businesses in sparsely populated rural districts using the South Taranaki District as a case study. The role of economic development agencies and district councils is also examined using case studies of small towns in rural districts of Australia and the United States of America (USA). This study found a number of factors affect the future viability of small-to-medium sized retail businesses in sparsely populated rural districts. For the South Taranaki district, these factors include the arrival of large-scale supermarkets, followed by large scale retail chains such as The Warehouse. These factors, combined with changing rural population structures and economic ‘spikes’ relating to sporadic energy development, have significant implications for the long term viability of many SMEs in the district. Case studies of similar rural districts in the USA and Australia provided examples of strategies that could be used to manage these impacts. This thesis recommends policies, initiatives and strategies that may be considered by territorial local authorities, regional councils and central governments to help address the economic development challenges facing rural districts.

Many rural districts are facing economic decline because of a range of factors such as demographic change, changing socio-economic development patterns, farm amalgamations, the entry of large retail businesses, the so called ‘Big Box Retailing’ (BBRs), and a decline in rural infrastructure investment. These factors in turn affect the viability of many small-to-medium sized enterprises (SMEs), which are the primary employers and the engines for economic growth and employment in rural districts. The combined effect of these processes is that many rural districts struggle to keep young people, maintain economic and social diversity and attract new settlers and investment. This thesis seeks to answer the question as to how large scale retail businesses, rural farm amalgamations and declining rural populations impact on the viability of SME retail businesses in rural areas. In order to answer this question, this study identifies the key factors, which affect the future viability of small-to-medium sized retail businesses in sparsely populated rural districts using the South Taranaki District as a case study. The role of economic development agencies and district councils is also examined using case studies of small towns in rural districts of Australia and the United States of America (USA). This study found a number of factors affect the future viability of small-to-medium sized retail businesses in sparsely populated rural districts. For the South Taranaki district, these factors include the arrival of large-scale supermarkets, followed by large scale retail chains such as The Warehouse. These factors, combined with changing rural population structures and economic ‘spikes’ relating to sporadic energy development, have significant implications for the long term viability of many SMEs in the district. Case studies of similar rural districts in the USA and Australia provided examples of strategies that could be used to manage these impacts. This thesis recommends policies, initiatives and strategies that may be considered by territorial local authorities, regional councils and central governments to help address the economic development challenges facing rural districts.

The big-box retail stores such as Wal-Mart and Target have become the focus of many studies researching their impacts on local economic outcomes. This dissertation studies three related topics: (i) the dynamic interrelationship among the presence of the big-box stores, retail wage, and employment, (ii) the impact of the big-box retailers on personal income growth, and (iii) the dynamic interrelationship between the presence of big-box retailers and personal income growth. The research draws important insights with potential implications for regional developers and policy makers. The first essay analyzes the dynamic relationship among the presence of the big-box retailers, retail wage, and employment at the county level for 1986-2005. A vector autoregression model is applied on panel data. Impulse response functions and variance decompositions are also presented. Results suggest that the presence of big-box stores decreases retail wages and increases retail employment. Retail employment has a higher impact on the retailers’ location decision than retail wage. The results also show that the presence of Wal-Mart drives the above-mentioned effects, while the presence of Target is insignificant. The second essay investigates the impact from the presence of big-box retailers on personal income growth in U.S. counties between 2000 and 2005 - based on neoclassical growth models of cross-country income convergence. Results suggest that counties having both Wal-Mart and Target stores experienced slower growth in personal income. After controlling for spatial autocorrelation, similar to the first essay, the effect of Wal-Mart’s presence on personal income growth is dominant in terms of statistical significance relative to Target’s. The third essay expands the second essay and investigates the dynamic interaction between the presence of big-box retailers and personal income growth over time at the county level for the period 1987-2005, using a panel vector autoregression model. For this analysis, the earning shares of natural resources and manufacturing sectors are included - assuming that all the variables are endogenous to one another. The findings indicate that big-box retailers negatively affect personal income growth, which is consistent with the second essay. However, personal income growth has an insignificant effect on the big-box retailers’ location decision.