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

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  • Timothy Bates
  • Alicia Robb

Abstract

High prevailing levels of criminal activity have numerous impacts on the viability of urban small businesses and the various impacts are not uniformly negative. It is the negative impacts, however, that are most often noted. Either the perception or reality of rampant crime can scare away customers, potential employees, lending institutions, even casualty insurance underwriters. Yet, competitors may also be driven away. Operating in a high-crime area can be advantageous, on balance, for some firms. Our analysis of nearly 5,000 urban businesses started between 1986 and 1992 indicates that those most seriously impacted by crime exhibit no measureable disadvantage regarding firm size, capitalization, survival rates, or other traits, relative to firms whose owners report that crime has not impacted them negatively.

Suggested Citation

  • Timothy Bates & Alicia Robb, 2007. "Crime's Impact on the Survival Prospects of Young Urban Small Businesses," Working Papers 07-30, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:07-30
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    File URL: https://www2.census.gov/ces/wp/2007/CES-WP-07-30.pdf
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    Cited by:

    1. 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.
    2. Hua, Nan & Yang, Yang, 2017. "Systematic effects of crime on hotel operating performance," Tourism Management, Elsevier, vol. 60(C), pages 257-269.
    3. 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.
    4. 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.
    5. 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.
    6. Stuart S. Rosenthal & Amanda Ross, 2010. "Violent Crime, Entrepreneurship, and Cities," NBER Chapters, in: Cities and Entrepreneurship, National Bureau of Economic Research, Inc.

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