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Crime's Impact on the Survival Prospects of Young Urban Small Businesses

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  • Timothy Bates

    (Wayne State University, Tim.bates@wayne.edu)

  • Alicia Robb

    (University of California, Santa Cruz)

Abstract

The authors investigate the empirical link between prevailing levels of crime and the viability of small businesses. Using confidential microdata from the U.S. Census Bureau's Characteristics of Business Owners Survey , they find, on balance, that young firms operating in high-crime niches in urban America appear not to be disadvantaged by crime. Crime's impact may certainly be harmful, with other factors being constant, but the crux of the findings is that other factors are not constant. Firms most negatively affected by crime do not appear to be less viable than otherwise identical firms reporting that crime has no effect on their businesses. High-crime niches may in fact be rational choices for some business owners, present and potential.

Suggested Citation

  • Timothy Bates & Alicia Robb, 2008. "Crime's Impact on the Survival Prospects of Young Urban Small Businesses," Economic Development Quarterly, , vol. 22(3), pages 228-238, August.
    • Handle: RePEc:sae:ecdequ:v:22:y:2008:i:3:p:228-238
    DOI: 10.1177/0891242408321255
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    References listed on IDEAS

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    1. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    2. Robert W. Fairlie & Alicia M. Robb, 2007. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 289-323.
    3. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    4. Brian Headd, 1999. "The Characteristics of Business Owners Database, 1992," Working Papers 99-8, Center for Economic Studies, U.S. Census Bureau.
    5. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
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    Cited by:

    1. Rosenthal, Stuart S. & Ross, Amanda, 2010. "Violent crime, entrepreneurship, and cities," Journal of Urban Economics, Elsevier, vol. 67(1), pages 135-149, January.
    2. George Saridakis & Anne-Marie Mohammed & Sandra Sookram, 2015. "Does Crime Affect Firm Innovation? Evidence from Trinidad and Tobago," Economics Bulletin, AccessEcon, vol. 35(2), pages 1205-1215.
    3. Hua, Nan & Yang, Yang, 2017. "Systematic effects of crime on hotel operating performance," Tourism Management, Elsevier, vol. 60(C), pages 257-269.
    4. Folorunsho M. Ajide & Olasupo I. Bankefa & Rufus A. Ajisafe, 2018. "Criminal Activities and Firms’ Market Power: Evidence from Nigerian Banking Industry," Global Business Review, International Management Institute, vol. 19(5), pages 1207-1223, October.
    5. Bart Sleutjes & Beate Völker, 2012. "The Role Of The Neighbourhood For Firm Relocation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 103(2), pages 240-249, April.
    6. Pascal Beckers & Bart Sleutjes, 2014. "Neighbourhood Spatial Order, the Local Economy and Firm Mobility in Urban Areas of the Netherlands," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(6), pages 2103-2122, November.

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    Keywords

    crime; impact; small business;
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