‘THE EXTRA EFFORT HAS REALLY PAID OFF’
Mina Henni Røhme (25) and Ina Lisa Tobiassen (24) received the award for best master’s thesis in 2022 at the Department of Economics.
Ranked best master's thesis of the year: 'It's an honour!'
Hien Nguyen and Kenneth Hartmann's master's thesis on competition in the grocery industry went all the way to the top at the Department of Economics at NHH.
The committee's assesment in full
A committee consisting of Sissel Jensen and Linda Orvedal has evaluated five master theses for the award. While the overall quality of the submissions was exceptionally high, the committee has selected the winners of the 2024 Master’s Thesis Award in Economics:
Hien Nguyen and Kenneth Hartmann for their master thesis "Restrictive covenants in the Norwegian grocery market: an empirical study" supervised by Mateusz Mysliwski.
- In their thesis, Nguyen and Hartmann analyze the extent to which grocery chains in Norway have used restrictive covenants for anti-competitive purposes and the impact of these covenants on local grocery markets. Restrictive covenants, which block competitors from accessing prime retail spaces, force new entrants or smaller players into less desirable locations, thereby limiting competition.
- Using data from the Norwegian land register, they identify these covenants and analyze their effects on market concentration, store turnover, and proximity to competitors. The authors employ a Two-Stage Least Squares (2SLS) methodology to estimate the relationship between the number of restrictive covenants in local markets and market concentration. They also use Ordinary Least Squares (OLS) to analyze the relationship between same-chain restrictive covenants and both store turnover and store-to-competitor distance. Their findings indicate that restrictive covenants are associated with higher market concentration and store turnover, while their effect on store distance is not statistically significant.
- The thesis provides support for the 2024 ban on restrictive covenants, offering empirical evidence and insights for informed policy-making. By combining a comprehensive registry of covenants with an analysis of their competitive effects, Nguyen and Hartmann address a critical issue in Norway’s concentrated grocery market and make a valuable contribution to understanding competition barriers.
What is the effect of restricted agreements in the highly concentrated Norwegian grocery market?
Restrictive agreements meaning those that block competitors from accessing prime retail space, force new entrants or smaller players into less attractive locations, thereby limiting competition.
This is what Hien Nguyen and Kenneth Hartmann wanted to investigate.
Now their master's thesis has been voted the best of the year at the Department of Economics in 2024.
'It's amazing! We did not expect this when we submitted our thesis. It's an honor to receive this award and create such a memorable experience at NHH', Nguyen says.
'I have worked with many talented master's students over the years, but these two stand out with their exceptional drive', says supervisor and Assistant Professor at the Department of Economics, Mateusz Mysliwski.
Four main actors
The Norwegian grocery market is dominated by four main actors. Agreements, many that date back a long time, has helped them thrive.
But how much impact has these agreements truly had?
To try to answer this, Nguyen and Hartmann have manually gone through several hundreds of so called "restrictive covenants". Meaning specific clauses or conditions included in an agreement that impose limitations or restrictions on the use of a property, serving the interest of the party issuing it.
They found restricted covenants as early as in 1960, with a substantially increase in the early 2000's.
An example on such agreements would be that a big grocery chain would accept a locations in a shopping mall only on the guarantee that they would be the only grocery store there.
'It was a lot of work, but we enjoyed the process together and learned new things along the way', Hartmann says and the two recently graduated students nod and smile at each other.
'We think that our thesis has, to some extent, provided empirical evidence relevant to the ban on restrictive covenants that came into force at the beginning of this year', Nguyen says.
Honored by the committee
The thesis, "Restrictive covenants in the Norwegian grocery market: an empirical study", was picked as the winner among five A graded master's theses.
In their assesment Professor Sissel Jensen and Associate Professor Linda Orvedal emphasize the possible impact of the thesis in a broader sense:
"By combining a comprehensive register of agreements with an analysis of their competitive effects, Nguyen and Hartmann address a critical problem in Norway's concentrated grocery market and make a valuable contribution to understanding competition barriers."
Supervisor Mysliwski is thrilled on behalf of Nguyen and Hartmann:
'I vividly remember our first meeting when they both expressed that they didn’t just want to write a thesis—they wanted to write an outstanding one. At that moment, I knew I could suggest a challenging but highly policy-relevant topic, which required extensive forensic work with text data and the clever application of econometric methods.', he says and adds:
'Hien and Kenneth were remarkably diligent, consistently keeping their eyes on the prize, and that dedication is why they succeeded. Let me extend my congratulations to Hien and Kenneth once again, and I wish them all the best for their future endeavors!'
Former PhD student, Alina Ozhegova, also supervised and helped Nguyen and Hartmann with their thesis.