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

Listed author(s):
  • Timothy Bates
  • Alicia Robb

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.

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File Function: First version, 2007
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 07-30.

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Length: 30 pages
Date of creation: Oct 2007
Handle: RePEc:cen:wpaper:07-30
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