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Does local business ownership insulate cities from economic shocks?

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  • Kolko, Jed
  • Neumark, David

Abstract

We assess a prominent argument for local economic policies that favor locally-owned businesses - namely, that locally-owned firms are more likely to internalize the costs to the community of decisions to reduce employment and hence help to insulate cities from adverse economic shocks. We test this argument by examining how establishment-level employment responses to economic shocks are affected by establishment ownership. We find evidence that some types of local ownership do insulate regions from economic shocks, although the clearest benefits do not come from small, independent businesses, but instead from corporate headquarters and, to a lesser extent, from small, locally-owned chains.

Suggested Citation

  • Kolko, Jed & Neumark, David, 2010. "Does local business ownership insulate cities from economic shocks?," Journal of Urban Economics, Elsevier, vol. 67(1), pages 103-115, January.
  • Handle: RePEc:eee:juecon:v:67:y:2010:i:1:p:103-115
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    Cited by:

    1. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779 Elsevier.
    2. Rupasingha, Anil, 2013. "Locally owned: Do local business ownership and size matter for local economic well-being?," FRB Atlanta Community and Economic Development Discussion Paper 2013-01, Federal Reserve Bank of Atlanta.
    3. repec:taf:jitecd:v:26:y:2017:i:7:p:759-776 is not listed on IDEAS
    4. Jingbo Cui & Hang Qian, 2017. "The effects of exports on facility environmental performance: Evidence from a matching approach," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(7), pages 759-776, October.
    5. Martin Carree & Emilio Congregado & Antonio Golpe & André van Stel, 2015. "Self-employment and job generation in metropolitan areas, 1969–2009," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 27(3-4), pages 181-201, March.
    6. Kaitlyn Harger & Brad R. Humphreys & Amanda Ross, 2016. "Do New Sports Facilities Attract New Businesses?," Journal of Sports Economics, , vol. 17(5), pages 483-500, June.
    7. Jingbo Cui & GianCarlo Moschini, 2018. "Firm Internal Network, Environmental Regulation, and Plant Death," Center for Agricultural and Rural Development (CARD) Publications 18-wp585, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. repec:esx:essedp:729 is not listed on IDEAS
    9. repec:taf:regstd:v:51:y:2017:i:5:p:659-673 is not listed on IDEAS
    10. Jan Peter aus dem Moore & Alexandra Spitz-Oener, 2012. "Bye Bye, G.I. - The Impact of the U.S. Military Drawdown on Local German Labor Markets," SFB 649 Discussion Papers SFB649DP2012-024, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

    More about this item

    Keywords

    Local ownership Employment shocks Employment stability;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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