Locally owned: Do local business ownership and size matter for local economic well-being?
AbstractThe concept of “economic gardening”—supporting locally owned businesses over nonlocally owned businesses and small businesses over large ones—has gained traction as a means of economic development since the 1980s. However, there is no definitive evidence for or against this pro-local business view. Therefore, I am using a rich U.S. county-level data set to obtain a statistical characterization of the relationship between local-based entrepreneurship and county economic performance for the period 2000–2009. I investigate the importance of the size of locally based businesses relative to all businesses in a county measured by the share of employment by local businesses in total employment. I also disaggregate employment by local businesses based on the establishment size. My results provide evidence that local entrepreneurship matters for local economic performance and smaller local businesses are more important than larger local businesses for local economic performance.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Atlanta in its series Community and Economic Development Discussion Paper with number 2013-01.
Date of creation: 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-ENT-2013-09-26 (Entrepreneurship)
- NEP-HME-2013-09-26 (Heterodox Microeconomics)
- NEP-URE-2013-09-26 (Urban & Real Estate Economics)
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