Estimating the empirical entry model developed by Bresnahan and Reiss
(1991), this paper examines the extent to which the entry of a large discount
store into a region changes the competitive conduct. In order to calculate the
entry thresholds, we utilize county-level geographic information of three large
discount stores: Emart, Homeplus, and Lottemart. The analysis shows that a
large discount retailer in Korea receives a small amount of excess profits from
monopolistic or oligopolistic market. The entry of an additional large discount
retailer promotes competition, but the effect on the degree of competition is
not substantial.