Does IKEA keep its promises? : Impact of large retail chains on medium-sized citiesusing the example of IKEA in Sweden

Abstract: Large investments in sparsely populated areas have the reputation to increase the attractiveness of these areas. This is said to lead to more investments, followed by growths in population, unemployment rates and tax revenues. Usually, city officials in Sweden trust in this formula and have the tendency to provide financial and other incentives for companies to start large investment projects in their towns (Hrelja, Isaksson, and Richardson, 2012). This thesis investigates the actual impact of such projects by the example of the large retail chain IKEA in Sweden. The development of three medium-sized cities in sparsely populated areas in Sweden which recently opened IKEA stores are compared to close-by cities and benchmark cities of a comparable size with respect to their unemployment rates, income, population, retail sales and trade indexes. The results will be used to predict the impact of the new IKEA store planned in Umeå.