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A spatial model of growth relationships and Latino-owned business

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  • Craig Wesley Carpenter

    (Texas A&M University)

  • Scott Loveridge

    (Michigan State University)

Abstract

The expansion of ethnic minorities evokes policy debate about their impact on the local economy, driving a need to measure their effects. This article introduces a spatial econometrics approach to Deller et al.’s expansion of the Carlino-Mills growth model. We employ the confidential US Census data to investigate drivers of local economic performance with emphasis on the role of Latino-owned businesses (LOB) on convergence. The model also includes a number of controls. The model produces direct, indirect, and total impact estimates, and expected values for the non-LOB controls. The estimated total impact of LOB employment on county-level average annual growth rates is significant and positive, but a rurality interaction carries the opposite sign, such that the total impact in rural areas is negative. The negative effect in rural areas is due to negative spatial spillovers captured by the model. The spatial Durbin error model empirical results indicate that although LOB employment interacted with rurality significantly impacts county-level growth rates of population, employment, and income, they do not change the equilibrium relationship between these variables captured by the speed of convergence.

Suggested Citation

  • Craig Wesley Carpenter & Scott Loveridge, 2019. "A spatial model of growth relationships and Latino-owned business," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 541-557, December.
  • Handle: RePEc:spr:anresc:v:63:y:2019:i:3:d:10.1007_s00168-019-00942-x
    DOI: 10.1007/s00168-019-00942-x
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    Cited by:

    1. Anders Van Sandt & Craig Wesley Carpenter & Rebekka Dudensing & Scott Loveridge, 2021. "Estimating determinants of healthcare establishment locations with restricted federal administrative data," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1328-1346, June.
    2. Carpenter, Craig Wesley & Loveridge, Scott, 2021. "Can Latinx Entrepreneurship Help Rural America?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 36(4), October.

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    More about this item

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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