Sage Journals: Discover world-class research

Abstract

This study evaluates business closure rates in minority neighborhoods within a metropolitan area and extends this analysis across six U.S. metropolitan areas during the COVID-19 pandemic. Utilizing business and demographic data at the census-tract level, the authors develop a comparative research strategy to explore variations in closure rates among racially diverse neighborhoods. This analysis employs both global and local models to examine spatial interactions among variables associated with business closure rates. The authors use ordinary least squares multivariate regression to identify broad patterns at the metropolitan level and geographically weighted regression to assess local variations and interactions within specific spatial units. The findings reveal diverse dynamics between racial composition and economic outcomes, highlighting uneven closure rates across the metropolitan areas. This study enhances our understanding of the economic impacts on urban neighborhoods during the COVID-19 pandemic by providing detailed comparison analysis and spatial analysis, offering valuable insights for economic development and policy making.

Keywords

business closure rates minority neighborhoods urban economics spatial analysis comparison analysis

Get full access to this article

View all access options for this article.

References

Atkins

Cook

Seamans

(2022). Discrimination in lending? Evidence from the Paycheck Protection Program. Small Business Economics, 58(2), 843–865. https://doi.org/10.1007/s11187-021-00533-1

Barkley

Schweitzer

(2023). Credit availability for minority business owners in an evolving credit environment. Economic Development Quarterly, 37(3), 230–242. https://doi.org/10.1177/08912424231168331

Bartik

A. W.

Bertrand

Cullen

Glaeser

E. L.

Luca

Stanton

(2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences, 117(30), 17656–17666. https://doi.org/10.1073/pnas.2006991117

Brunsdon

Fotheringham

A. S.

Charlton

M. E.

(1996). Geographically weighted regression: A method for exploring spatial nonstationarity. Geographical Analysis, 28(4), 281–298. https://doi.org/10.1111/j.1538-4632.1996.tb00936.x

Buffington

Chapman

Dinlersoz

Foster

Haltiwanger

(2021). High-frequency data from the U.S. Census Bureau during the COVID-19 pandemic: Small vs. new businesses. Business Economics, 56(3), 155–167. https://doi.org/10.1057/s11369-021-00229-0

Cajner

Crane

L. D.

Decker

R. A.

Grigsby

Hamins-Puertolas

Hurst

Kurz

Yildirmaz

(2020). The U.S. labor market during the beginning of the pandemic recession (Working Paper 27159). National Bureau of Economic Research. https://doi.org/10.3386/w27159

Cassell

M. K.

Schwan

Schneiberg

(2023). Bank types, inclusivity, and Paycheck Protection Program lending during COVID-19. Economic Development Quarterly, 37(3), 277–294. https://doi.org/10.1177/08912424231163485

CDC . (2023). https://www.cdc.gov/globalhealth/covid-19/index.html

Couch

K. A.

Fairlie

R. W.

(2020). Early evidence of the impacts of COVID-19 on minority unemployment. Journal of Public Economics, 192, 104287. https://doi.org/10.1016/j.jpubeco.2020.104287

10.

Crane

L. D.

Decker

R. A.

Flaaen

Hamins-Puertolas

Kurz

(2022). Business exit during the COVID-19 pandemic: Non-traditional measures in historical context. Journal of Macroeconomics, 72, 103419. https://doi.org/10.1016/j.jmacro.2022.103419

11.

de Vaan

Mumtaz

Nagaraj

Srivastava

S. B.

(2021). Social learning in the COVID-19 pandemic: Community establishments’ closure decisions follow those of nearby chain establishment. Management Science, 67(7), 4446–4454. https://doi.org/10.1287/mnsc.2021.4033

12.

Duprey

Rigobon

D. E.

Schnattinger

Kotlicki

Baharian

Hurd

T. R.

(2022). Business closures and (re)openings in real time using Google Places (Working Paper No. 2022–1). Bank of Canada Staff Working Paper. https://doi.org/10.34989/swp-2022-1

13.

Fairlie

(2020). The impact of COVID-19 on small business owners: Evidence from the first three months after widespread social-distancing restrictions. Journal of Economics & Management Strategy, 29(4), 727–740. https://doi.org/10.1111/jems.12400

14.

Fairlie

Fossen

F. M.

(2022). The early impacts of the COVID-19 pandemic on business sales. Small Business Economics, 58(4), 1853–1864. https://doi.org/10.1007/s11187-021-00479-4

15.

Farboodi

Jarosch

Shimer

(2021). Internal and external effects of social distancing in a pandemic. Journal of Economic Theory, 196, 105293. https://doi.org/10.1016/j.jet.2021.105293

16.

Feldman

M. P.

(2001). The entrepreneurial event revisited: Firm formation in a regional context. Industrial and Corporate Change, 10(4), 861–891. https://doi.org/10.1093/icc/10.4.861

17.

Florida

Rodríguez-Pose

Storper

(2023). Critical commentary: Cities in a post-COVID world. Urban Studies, 60(8), 1509–1531. https://doi.org/10.1177/00420980211018072

18.

Fotheringham

A. S.

Charlton

M. E.

Brunsdon

(1998). Geographically weighted regression: A natural evolution of the expansion method for spatial data analysis. Environment and Planning A: Economy and Space, 30(11), 1905–1927. https://doi.org/10.1068/a301905

19.

García

R. E.

Darity

W. A.

Jr. (2022). Self-reporting race in small business loans: A game-theoretic analysis of evidence from PPP loans in Durham, NC. AEA Papers and Proceedings, 112, 299–302. https://doi.org/10.1257/pandp.20221031

20.

Goolsbee

Syverson

(2021). Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020. Journal of Public Economics, 193, 104311. https://doi.org/10.1016/j.jpubeco.2020.104311

21.

Granovetter

(1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3), 481–510. https://doi.org/10.1086/228311

22.

Gupta

Montenovo

Nguyen

T. D.

Lozano Rojas

Schmutte

I. M.

Simon

K. I.

Weinberg

B. A.

Wing

(2020). Effects of social distancing policy on labor market outcomes (Working Paper No. 27280). National Bureau of Economic Research. https://doi.org/10.3386/w27280

23.

Hamilton

(2020). From survival to revival: How to help small businesses through the COVID-19 crisis (Policy Proposal 2020-14). The Hamilton Project.

24.

Huang

Bao

Zhang

Zhao

(2023). Black businesses matter: A longitudinal study of black-owned restaurants in the COVID-19 pandemic using geospatial big data. Annals of the American Association of Geographers, 113(1), 189–205. https://doi.org/10.1080/24694452.2022.2095971

25.

Hurvich

C. M.

TSAI

C.-L.

(1989). Regression and time series model selection in small samples. Biometrika, 76(2), 297–307. https://doi.org/10.1093/biomet/76.2.297

26.

Kalogiannidis

(2020). COVID impact on small business. International Journal of Social Science and Economics Invention, 6, https://doi.org/10.23958/ijssei/vol06-i12/257

27.

Kim

A. T.

Kim

Tuttle

S. E.

Zhang

(2021). COVID-19 and the decline in Asian American employment. Research in Social Stratification and Mobility, 71, 100563. https://doi.org/10.1016/j.rssm.2020.100563

28.

Kotomin

Frere

Morr

(2024). Forgive me not? Racial and institutional disparities in the Paycheck Protection Program loan forgiveness. Small Business Economics. https://doi.org/10.1007/s11187-024-00952-w

29.

Krumel

T. P.

Goodrich

Sun

Fiala

(2022). Linking employment and death: Measuring the structural disparity in COVID-19 deaths for non-telework essential workers. The B.E. Journal of Economic Analysis & Policy, 22(4), 715–738. https://doi.org/10.1515/bejeap-2021-0332

30.

Kurmann

Lalé

(2020). The impact of COVID-19 on small business employment and hours: Real-time estimates with homebase data (Working Paper 2020–09). Document de travail. https://www.econstor.eu/handle/10419/234809

31.

Lee

S. Y.

(Tim), Park

Shin

(2021). Hit harder, recover slower? Unequal employment effects of the COVID-19 shock (Working Paper 28354). National Bureau of Economic Research. https://doi.org/10.3386/w28354

32.

Lester

T. W.

Wilson

M. D.

(2023). The racial and spatial impacts of the Paycheck Protection Program. Economic Development Quarterly, 37(3), 243–258. https://doi.org/10.1177/08912424231157693

33.

Stoler

(2023). COVID-19 and urban futures: Impacts on business closures in Miami-Dade County. Annals of the American Association of Geographers, 113(4), 834–856. https://doi.org/10.1080/24694452.2022.2134839

34.

Ning

Jing

Lessani

M. N.

(2024). Understanding the bias of mobile location data across spatial scales and over time: A comprehensive analysis of SafeGraph data in the United States. PLOS ONE, 19(1), e0294430. https://doi.org/10.1371/journal.pone.0294430

35.

Liu

C. Y.

Nazareno

(2024). State responses during the COVID-19 pandemic and their impacts on small businesses. Small Business Economics. https://doi.org/10.1007/s11187-024-00923-1

36.

Liu

Shi

Peng

Zhang

(2023). Evaluation of the resilience of the catering industry in Hong Kong before and after the COVID-19 outbreak based on point-of-interest data. ISPRS International Journal of Geo-Information, 12(11), Article 11. https://doi.org/10.3390/ijgi12110443

37.

Molotch

(1993). The political economy of growth machines. Journal of Urban Affairs, 15(1), 29–53. https://doi.org/10.1111/j.1467-9906.1993.tb00301.x

38.

Motoyama

(2022). Is COVID-19 causing more business closures in poor and minority neighborhoods? Economic Development Quarterly, 36(2), 124–133. https://doi.org/10.1177/08912424221086927

39.

Porter

M. E.

(1997). New strategies for inner-city economic development. Economic Development Quarterly, 11(1), 11–27. https://doi.org/10.1177/089124249701100102

40.

Porter

M. E.

(2016). Inner-city economic development: Learnings from 20 years of research and practice. Economic Development Quarterly, 30(2), 105–116. https://doi.org/10.1177/0891242416642320

41.

SafeGraph . (2023). Precision. SafeGraph. https://docs.safegraph.com/docs/precision

42.

Shybalkina

(2022). Place-based small business support and its implications for neighborhood revitalization. Economic Development Quarterly, 36(4), 355–370. https://doi.org/10.1177/08912424221123501

43.

U.S. Census Bureau . (2023). Business Dynamics Statistics (BDS) explorer. Census.Gov. https://www.census.gov/data/data-tools/bds-explorer.html

44.

Waldmann

(2020, March 28). The real-time impact COVID-19 is having on small businesses. Homebase. https://joinhomebase.com/blog/real-time-covid-19-data/

45.

Walmsley

T. L.

Rose

Wei

(2021). Impacts on the U.S. macroeconomy of mandatory business closures in response to the COVID-19 Pandemic. Applied Economics Letters, 28(15), 1293–1300. https://doi.org/10.1080/13504851.2020.1809626

46.

Wilson

W. J.

(1995). The political economy and urban racial tensions. The American Economist, 39(1), 3–14. https://doi.org/10.1177/056943459503900101

47.

Wolfe

M. T.

Patel

P. C.

(2021). Everybody hurts: Self-employment, financial concerns, mental distress, and well-being during COVID-19. Journal of Business Venturing Insights, 15, e00231. https://doi.org/10.1016/j.jbvi.2021.e00231

48.

Zhai

Yue

(2022). Economic resilience during COVID-19: An insight from permanent business closures. Environment and Planning A: Economy and Space, 54(2), 219–221. https://doi.org/10.1177/0308518X211055181

How Much Were Minority Neighborhoods in the United States Affected During COVID-19 in the Aspect of Business Closure Rates? Evidence From Six Metropolitan Areas

Abstract

Keywords

Get full access to this article

References