Lab publication on business survival and relocation

Although neighborhood crime levels can be impacted by the presence of businesses nearby, it is also the case that crime in the neighborhood can impact businesses. High levels of crime can reduce patronage of businesses, which can result in them going out of business, or choosing to relocate. This study uses rich annual data on businesses and crime events in the Southern California region over a number of years to explore how nearby crime events impact business decisions to go out of business, move, or even where to move. The study finds that in general, higher violent and property crime are significantly associated with both business failure and mobility, and that higher crime in a destination neighborhood reduces the likelihood that a business locates there. The study also presents findings specific to industries.

You can access the article by Dr. John R. Hipp, Seth Williams, Dr. Young-an Kim, and Dr. Jae Hong Kim in Social Science Research entitled, “Fight or Flight? Crime as a Driving Force in Business Failure and Business Mobility”.

Get it here: https://www.sciencedirect.com/science/article/pii/S0047235218303775

Abstract:

A growing body of research has documented the consequences of neighborhood crime for a myriad of individual, household, and community outcomes. Given that neighborhood businesses figure into the link between neighborhood structure and crime as sources of employment or sites for neighbor interaction, the present study examines the extent to which neighborhood crime is associated with the survival, mobility, and destination locations of businesses in the subsequent year. Using business data from Reference USA (Infogroup 2015) and crime data from the Southern California Crime Study (SCCS) we assess this question for neighborhoods across cities in the Southern California region. We find that in general, higher violent and property crime are significantly associated with both business failure and mobility, and that higher crime in a destination neighborhood reduces the likelihood that a business locates there. We also present findings specific to industries, and discuss the implications of our findings for future research.