Abstract

http://ssrn.com/abstract=1489238
 
 

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Does Local Business Ownership Insulate Cities from Economic Shocks?


Jed Kolko


Public Policy Institute of California

David Neumark


University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)


IZA Discussion Paper No. 4415

Abstract:     
We assess a prominent argument for local economic policies that favor locally-owned businesses ヨ namely, that locally-owned firms are more likely to internalize the costs to the community of decisions to reduce employment and hence help to insulate cities from adverse economic shocks. We test this argument by examining how establishment-level employment responses to economic shocks are affected by establishment ownership. We find evidence hat some types of local ownership do insulate regions from economic shocks, although the clearest benefits do not come from small, independent businesses, but instead from corporate headquarters and, to a lesser extent, from small, locally-owned chains.

Number of Pages in PDF File: 44

Keywords: employment stability, employment shocks, local ownership

JEL Classification: R11, R38, J23

working papers series


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Date posted: October 15, 2009  

Suggested Citation

Kolko, Jed and Neumark, David, Does Local Business Ownership Insulate Cities from Economic Shocks?. IZA Discussion Paper No. 4415. Available at SSRN: http://ssrn.com/abstract=1489238

Contact Information

Jed Kolko (Contact Author)
Public Policy Institute of California ( email )
500 Washington Street
Suite 800
San Francisco, CA 94111
United States
David Neumark
University of California, Irvine - Department of Economics ( email )
3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-824-8496 (Phone)
949-824-2182 (Fax)
HOME PAGE: http://www.socsci.uci.edu/~dneumark/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
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