Small, Locally-Owned Businesses Create Higher Economic Growth Rates than Big, Outside Firms...
A new report from Pennsylvania State University finds that counties with more small (between 10 and 99 employees), locally-owned businesses have higher rates of economic growth than those without. At the same time, counties with large, out-of-state-owned businesses have slower growth. This is a very interesting report for places like Appalachia, where governments have historically spent more effort and resources on courting outside industries than nurturing entrepreneurship. And it rings especially true on the heels of the news that a call center in Perry County, KY is laying off 150 employees. The Daily Yonder has the details: Small, Local Businesses Speed Income Growth It does matter whether a business is locally owned. Researchers at Pennsylvania State University have found that counties with more small, locally owned businesses have stronger economic growth than communities with larger businesses owned by outsiders. "Local ownership matters in important ways," said economist Stephan Goetz who was co-author of the study with David Fleming, a Penn State graduate student. "Smaller, locally owned businesses, it turns out, provide higher, long-term economic growth." Larger firms owned by people outside a county depress growth, the researchers found. Goetz and Fleming looked to see if per capita income growth in counties was affected by the size and ownership of local businesses. The two studied U.S. counties during the period from 2000 to 2007. The effect of having locally-owned, small firms (with between 10 and 99 employees) on a county's economy was significant. There was a strong, positive relationship between...
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