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The Impact of Large Plant Openings and Community Banks on Small Business Development

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  • Ryan, Alexander

Abstract

To assist policymakers and economic developers in measuring the effectiveness of using firm-specific incentives to attract large manufacturing investments and catalyze broader economic development, I study the role of access to community bank capital in catalyzing spillovers from large manufacturing plants to small business development. I construct a novel dataset of large manufacturing plant openings between 2010 and 2018 and estimate the impact of these openings on small business lending, creation, and expansion in the local economy, using difference-in-differences designs with multiple control groups. The results suggest that community banks drive post-opening increases in small business lending, which translates to higher growth rates in small business creation and expansion. Small businesses in complementary industries experience the largest growth, while small businesses that may compete for labor and other resources do not. These findings will inform policymakers evaluating which places will benefit from place-based policies and financial regulators monitoring the consolidation of the banking industry.

Suggested Citation

  • Ryan, Alexander, 2026. "The Impact of Large Plant Openings and Community Banks on Small Business Development," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404879, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404879
    DOI: 10.22004/ag.econ.404879
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