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Assembling the Puzzle of the Nonprofit-Economic Development Linkage

Listed author(s):
  • Brennan John F.


    (Public and International Affairs, University of North Carlolina Wilmington, Wilmington, NC, USA)

  • Paarlberg Laurie


    (Bush School of Government and Public Service, Texas A&M University, College Station, Texas)

  • Hoyman Michele


    (Department of Political Science, University of North Carolina, Chapel Hill, NC, USA)

Registered author(s):

    This study seeks to quantify the impact of the nonprofit sector on economic development by more clearly defining the diverse roles that nonprofits may play in development – instrumental, expressive, and connective. We begin by summarizing existing research on nonprofit organizations and economic development. Using secondary data, we test our model in 360 U.S. metropolitan areas for the years 2001–2006. Do nonprofit organizations produce economic growth? Our statistical findings suggest, “Not really” and “It depends.” While some forms of nonprofit organizations (business associations) are positively related to growth, others such as congregations and social and fraternal associations may have a dampening effect. Overall, our findings suggest complex relationships between individual forms of capital, organizational structures, and development that may be place and time dependent. While our findings currently provide little guidance for policy makers attempting to promote economic development, our findings do have important implications for nonprofit and public policy scholars. Any attempt to explore the relationship between nonprofit activity and development must untangle indicators of individual behavior (church attendance or census return rates) from indicators of organizational structures (such as the number of specific organizations). Second, any effort to understand the impact of the nonprofit sector should disaggregate sector measures based upon a conceptual understanding of the diverse roles of various organizational types (for example, human service organizations versus social and fraternal organizations). Finally, growth and development and the role of the sector are contextual, exhibiting significant regional and temporal variation.

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    Article provided by De Gruyter in its journal Nonprofit Policy Forum.

    Volume (Year): 5 (2013)
    Issue (Month): 1 (October)
    Pages: 45-65

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    Handle: RePEc:bpj:nonpfo:v:5:y:2013:i:1:p:45-65:n:4
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    1. Philip Cooke & Nick Clifton & Mercedes Oleaga, 2005. "Social capital, firm embeddedness and regional development," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1065-1077.
    2. Franz Huber, 2009. "Social Capital Of Economic Clusters: Towards A Network-Based Conception Of Social Resources," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 100(2), pages 160-170, April.
    3. Ann Markusen & Greg Schrock, 2006. "The Artistic Dividend: Urban Artistic Specialisation and Economic Development Implications," Urban Studies, Urban Studies Journal Limited, vol. 43(10), pages 1661-1686, September.
    4. Melanie Blackwell & Steven Cobb & David Weinberg, 2002. "The Economic Impact of Educational Institutions: Issues and Methodology," Economic Development Quarterly, , vol. 16(1), pages 88-95, February.
    5. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    6. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    7. Anil Rupasingha & Stephan J. Goetz & David Freshwater, 2002. "Social and institutional factors as determinants of economic growth: Evidence from the United States counties," Review of Economic Design, Springer;Society for Economic Design, vol. 81(2), pages 139-155, April.
    8. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
    9. Rupasingha, Anil & Goetz, Stephan J. & Freshwater, David, 2000. "Social Capital and Economic Growth: A County-Level Analysis," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(03), pages 565-572, December.
    10. David Mcgranahan & Timothy Wojan, 2007. "Recasting the Creative Class to Examine Growth Processes in Rural and Urban Counties," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 197-216.
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