SOCIAL CAPITAL AND WELL-BEING These studies find that a community’s level of social capital, civic engagement, and well-being is positively related to the share of its economy held by local businesses, while the presence of mega-retailers like Walmart undermines social capital and civic participation. See this ILSR article for more background.

Small, Local, and Loyal: How Firm Attributes Affect Workers’ Organizational Commitment.” Katie L. Halbesleben and Charles M. Tolbert, Local Economy, Oct. 2014.

The authors of this paper — a professor and a Ph.D. candidate at Baylor University — find strong positive relationships between local ownership, firm size, and employee loyalty, which they refer to as organizational commitment. Using data from a nationally representative public opinion survey, they find that 57.2 percent of small firm workers scored in the highest commitment category, compared to 40.5 percent of large firm workers. They find a similar relationship for ownership, with 56 percent of workers at locally owned firms having high commitment scores, compared with just 38.7 percent of workers at non-locally owned firms. When they plotted the scores on a 16-point commitment scale, the authors found that, together, the two civic measures accounted for as much as a 1.7 point increase in organizational commitment, effects which held up when they included relevant control variables. “The analysis presented here clearly demonstrates a positive consequence of small, local businesses from the perspective of employees,” the authors conclude. “Clearly, small, local businesses do matter.” This study also reviews the literature on the benefits that employee loyalty confers on the business and on the surrounding community, and notes that strong ties between employers and employees create deeper roots in the community and less impetus for out-migration. “In this way,” the authors write, “the civic community perspective views small, locally owned businesses as lynchpins of community attachment and sustainability.”

College Graduates, Local Retailers, and Community Belonging in the United States.” Samuel Stroope, Aaron B. Franzen, Charles M. Tolbert, and F. Carson Mencken, Sociological Spectrum, Feb. 2014.

College-educated residents are an asset for a city. With higher education, however, comes increased geographic mobility, and cities and communities are increasingly challenged to retain their highly-educated residents. This study finds that the presence of locally owned retailers is one factor that leads all residents, and particularly college-educated residents, to stay put. “A retail environment not indicative of ‘anywhere America,’” the authors hypothesize, “help[s] those able to move to be less prone to feel that they could replace their current place of residence with anywhere else in America.” The authors prove their thesis by examining U.S. Census data and county-level data, and find that states with a greater share of locally owned retail experience a less-steep slope of college graduates migrating out from their counties. “In other words, stronger civic community provides a buffer in the migration of county residents as education increases,” the authors find. They conclude: “Though locales that encourage or allow absentee-owned retail may experience competitive advantage in the short run, they will not hold their own in the long run—in this instance, their own highly skilled workers… when counties cooperate together in order to protect and promote a broad localized retail climate from the ground up, they may also retain more of their highly educated and skilled residents. In a globalized world of increasing isomorphism, local places and regions’ spaces and establishments creatively infused with local flavor become one of the few resources that are not available elsewhere.”

Rolling Back Prices and Raising Crime Rates? The Walmart Effect on Crime in the United States” [PDF]. Scott E. Wolfe and David C. Pyrooz, The British Journal of Criminology, Jan. 2014.

This paper finds a “Walmart effect” on crime. After matching counties in which a Walmart expanded or opened and counties without a Walmart, and controlling for some of the strongest predictors of crime, the authors find that in counties with a new Walmart, crime declined less than it did in counties where Walmart did not open. The study focuses on the period from 1990 to 1999, a decade when crime in the U.S. declined overall and also a decade in which Walmart expanded dramatically. “If Walmart did not build in a county, property crime rates fell by an additional 17 units per capita from the 1990s to the 2000s,” the authors write. They conclude, “Put simply, United States counties where Walmart built in the 1990s did not experience the same crime decline as counties without Walmart growth.”

The Health and Wealth of US Counties: How the Small Business Environment Impacts Alternative Measures of Development.” Troy C. Blanchard, Charles Tolbert, and Carson Mencken, Cambridge Journal of Regions, Economy, and Society, 2011.

This is one of several studies that have drawn a link between an economy of small-scale businesses and improved community well-being, including lower rates of crime and better public health. “Counties with a vibrant small-business sector have lower rates of mortality and a lower prevalence of obesity and diabetes” compared to places dominated by big firms, the authors conclude. They surmise that a high degree of local ownership improves a community’s “collective efficacy” — the capacity of its residents to act together for mutual benefit. Previous research has linked collective efficacy to population health, finding that engaged communities tend to create the kinds of infrastructure that foster healthier choices.

Street Survey of Business Reopenings in Post-Katrina New Orleans” [PDF]. Richard Campanella, Tulane University, Jan. 2007.

To understand how businesses respond to catastrophe, Campanella, a geographer at Tulane, surveyed 16 miles of three major commercial arteries in New Orleans for the 15 months after Hurricane Katrina. He found that national chains were much slower to reopen than locally owned businesses. Almost half of locally owned businesses reopened within a month, compared to one-quarter of chains. After 15 months, 75 percent of locally owned businesses had reopened, compared to only 59 percent of national chains. By reopening promptly, locally owned businesses helped neighborhoods recover by providing goods and services, as well as creating community gathering spots for residents to commiserate and find mutual aid.

Walmart and Social Capital” [PDF]. Stephan J. Goetz and Anil Rupasingha, American Journal of Agricultural Economics, Dec. 2006.

The presence of a Walmart store reduces a community’s level of social capital, this study found. The study examined communities that had or gained Walmart stores in the 1990s and controlled for other variables known to affect social capital stocks in a community, such as educational attainment. “Both the initial number of [Walmart] stores and each store added per 10,000 persons during the decade reduced the overall social capital measure,” Goetz and Rupasingha found. Communities that gained a Walmart had fewer non-profit groups and social capital-generating associations (such as churches, political organizations, and business groups) per capita than those that did not. Walmart’s presence also depressed civic participation and is associated with lower voter turnout in the 2000 presidential election. Goetz and Rupasingha hypothesize that the drop in social capital is owned to the disappearance of local businesses and the decline of the downtown following Walmart’s arrival.

The Configuration of Local Economic Power and Civic Participation in the Global Economy.” Troy Blanchard and Todd L. Matthews, Social Forces, June 2006.

This study finds that residents of communities with highly concentrated economies tend to vote less and are less likely to keep up with local affairs, participate in community organizations, engage in reform efforts or participate in protest activities at the same levels as their counterparts in communities with dispersed economies composed predominantly of locally owned small businesses.