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UCI report says small businesses face heavy burden
Study co-author says findings validate efforts to attract and retain corporate headquarters.
By Susan BelknappPublished: October 16, 2009 02:05 AM
A recently released report from a UC Irvine economist contends that small or locally owned businesses do not insulate communities from layoffs and closures in difficult economic times. Rather, corporate headquarters do the most to protect cities from employment reductions.
This theory debunks a popular argument that owners of "mom and pop" stores are less likely to lay off employees, relocate or close their businesses when the economy sours, says David Neumark, UCI economics professor and a Bren fellow at the Public Policy Institute of California. The findings also validate the efforts of many local governments to attract and retain corporate headquarters, he said.
"People may prefer funky coffee shops downtown, but corporate headquarters and in some cases small chains may provide more stable jobs to the community," says Neumark.
The study, co-authored by Jed Kolko, associate director and research fellow at the institute, was published online recently in the Journal of Urban Economics.
Using a national database, researchers examined business patterns over 14 years. Businesses were classified as standalone, components of larger companies (such as chain restaurants and factories), or corporate headquarters.
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This theory debunks a popular argument that owners of "mom and pop" stores are less likely to lay off employees, relocate or close their businesses when the economy sours, says David Neumark, UCI economics professor and a Bren fellow at the Public Policy Institute of California. The findings also validate the efforts of many local governments to attract and retain corporate headquarters, he said. "People may prefer funky coffee shops downtown, but corporate headquarters and in some cases small chains may provide more stable jobs to the community," says Neumark. The study, co-authored by Jed Kolko, associate director and research fellow at the institute, was published online recently in the Journal of Urban Economics. Using a national database, researchers examined business patterns over 14 years. Businesses were classified as standalone, components of larger companies (such as chain restaurants and factories), or corporate headquarters. NEXT PAGE >> Related headlines O.C.'s unemployment rate drops in September O.C. employment should rise 13.4 percent by 2016 'OC METRO Minute,' Oct. 15: O.C. employment expected to improve by about 13 percent by 2016 Irvine-based Local.com sees record search traffic O.C.'s median home price rises in September |
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