Robert T. Greenbaum

The Impact of Violence Surges on Neighbourhood Business Activity

Theoretical and empirical arguments suggest that fear of violence will cause consumers, employees and entrepreneurs to alter their routine activities in areas that experience a surge in violent activity. This paper argues that understanding how businesses respond to violence has important implications for understanding community crime cycles and offers further evidence of how crime impacts the choices individuals make with regard to where they live, shop and work. Using newly available longitudinal business data and homicide data disaggregated to the ZIP code level, an examination is made of the impact of violence surges on the creation, destruction and growth of business establishments in five large US cities between 1987 and 1994. Controlling for pre-existing levels of violence, it is found that increased violence has the greatest consequences for service-related establishments in low-crime neighbourhoods. This finding is consistent with the notion that the fear of victimisation imposes additional indirect costs to society through its negative impact on local business establishments.

The Impact of Terrorism on Italian Employment and Business Activity

Despite the growth in research examining direct economic impacts of terrorism, the indirect impact of terrorism on the stability of local economies has generally been overlooked. Using panel data regression models and the most comprehensive open source database on terrorism currently available to researchers, the paper examines the impact of terrorism on employment and business outcomes in Italy from 1985 to 1997. It is found that terrorist attacks reduce the number of firms and employment in the year following an attack. By disaggregating net outcomes into their component gross flows, it is also found that these impacts are primarily attributable to reduced business formations and expansions.

Do Business Investment Incentives Promote Employment in Declining Areas? Evidence from EU Objective-2 Regions

To help address the large regional disparities in income that stubbornly persist across Europe, billions of euros have been invested in business investment incentives cofunded through the European Regional Development Fund. Since 1989, these incentives have been spatially targeted through various Structural Funds aimed at promoting economic and social cohesion among all European Union countries. ‘Objective 2’ of the Structural Funds aims to help revitalize those areas with persistently high unemployment and declining industrial production. Despite the continued popularity of these initiatives, no reliable ex-post empirical evidence of their impact is yet available to help EU policymakers refine future geographicallytargeted economic development policies. To begin to address the void, this article uses unique firm-specific data available for northern and central Italy to estimate a parametric difference in difference model that calculates the employment impact of the ‘Objective 2’ area business incentives net of all changes due to economic trends that are exogenous to the programme intervention. Mean impact results show that the incentives did promote positive employment growth in the target areas that would not have otherwise occurred. The analysis further finds that the incentives were most effective when targeting production in province–industry pairs that had the least severe declines during the years prior to the programme intervention.

Crime, Neighborhoods, and Units of Analysis: Putting Space in Its Place

Research has long established that crime is not randomly distributed, and spatial regression models of crime have clearly demonstrated that crime patterns cannot be explained merely by the socio-economic characteristics of a particular place. These findings are a reminder that “space matters” and that neighborhoods are not analytically independent units. Modeling the clustering of crime through spatial regression requires two important decisions. First, one must choose a unit of analysis that is consistent with the social processes believed to be driving the observed patterns. Second, one must consider the relationships among these units such that the model captures the influence the activities in other areas have on outcomes in the neighborhood. Within criminology, this second feature has been given insufficient consideration. Instead, the connectedness of spatial units has been taken as given and modeled solely through adjacency or a distance decay function. This chapter critiques such inductive approaches used to model and explain the spatial distribution of crime. Drawing upon the modeling of network autocorrelation within the social influence literature, we describe a deductive approach wherein specific social processes are posited, measured and modeled a priori. An empirical example using gang violence demonstrates this deductive approach and we find that the spatial distribution of violence is influenced by neighbors defined by the socio-spatial dimensions of gang rivalries rather than simply by geographically contiguous neighbors. We emphasize that a complete discussion of the appropriate unit of analysis must also consider the spatial dimensions of the social phenomena thought to be responsible for the spatial patterning.

Why Are State Policy Makers Still Proponents of Enterprise Zones? What Explains Their Action in the Face of a Preponderance of the Research?

The vast majority of states have implemented some version of enterprise zone (EZ) programs, which geographically target economic development efforts to revitalize distressed areas. While EZs have been studied extensively, there is little evidence that they have succeeded. Despite this, the number of programs, the number of EZs designated, and the land area covered by these zones have grown over time. This essay reviews the research on state EZ programs and explores why it has not had a greater influence on policy. One explanation we discuss is that the research has not been made accessible enough to policy makers and their staffs. Another explanation we posit is that political decision making that guides policy on EZ programs is influenced by many actors and sources of information not just the academic research literature. The essay discusses how the establishment or expansion of EZ programs may be encouraged by EZ businesses and landlords engaging in rent seeking behavior. The essay concludes by providing some recommendations regarding how the research community can make its work more relevant for state and local policy makers and how policy makers can become better consumers of evaluative research when implementing and refining programs.

The economic impact of terrorist incidents on the Italian hospitality industry

Acts of terror are intended to incite fear and intimidation, which makes tourism particularly susceptible to attacks. Because the hospitality industry serves as a useful barometer of the indirect impact of attacks, we examine the impact of terrorist incidents on lodging-use rates in Italy between 1995 and 1997. We make use of data on domestic as well as international terrorism at the city level to explore more localized implications of terrorist incidents. We find that lodgings used by foreign visitors are the most sensitive to terrorist attacks and that the incidents have the largest impact during the year of the attack.

Siting it Right: Do States Target Economic Distress When Designating Enterprise Zones?

Although economic development incentives have increasingly been targeted to particular geographic areas during recent decades, there has been surprisingly little examination of which areas are actually targeted. This article examines the targeting decisions of 10 states that implemented enterprise zone programs that limited their number of zones. Therefore, in all the states, not all distressed areas received enterprise zone incentives. By examining the relative distress of zone areas prior to designation, this study finds that factors such as population density, local housing market, and demographics help distinguish between distressed areas that received zones and those that did not. In addition, this article suggests that some characteristics of neighboring areas can help predict zone location. By helping to distinguish the types of places likely to be designated as enterprise zones, the article creates a framework for selecting comparison areas for enterprise zone impact evaluation.

Revitalizing regional economies through enterprise support policies: an impact evaluation of multiple instruments

Although enterprise support policies continue to be favored by policymakers in the European Union (EU) as tools for regional revitalization, there is as yet insufficient empirical evidence examining the effects of the policies on socially relevant outcomes. This paper helps fill that gap by utilizing firm-level data to offer robust counterfactual impact evaluation evidence on the employment effects of the coexisting European Regional Development Fund (ERDF) co-sponsored, national and regional programs commonly operated in many EU regions. By using data from a large northern Italian region, the analysis yields employment impact estimates of the policies under plausible identification assumptions. The paper finds no significant difference between the employment impacts of ERDF co-funded and national/regional programs, whereas, regardless of the funding body, the absolute per-firm employment effects of the programs are increasingly larger the higher the economic value of the incentives. However, the most generous incentives come with a much higher cost per each additional new job. The analysis also shows that the absolute per-firm employment effects of soft loans are similar to those of capital grants, but, because soft loans cost much less, they are more effective from a policy perspective.

Measuring the Distribution of Economic Development Tax Incentive Intensity

The targeting of economic development incentives at distressed locations or particular industries is typically justified based on equity and efficiency grounds. However, existing empirical studies fail to fully explain the distribution of incentives in a region or state because they do not account for variations in the distribution of population or industries. This article contributes to the literature on the targeting of incentives in several important ways, using the example of Ohio. The distribution of economic incentives is examined using the intensity of incentives, which allows for examination of whether incentives are targeted to distressed locations or industries. Intensity of incentives is measured as the value or number of incentives weighted by the number of employees and firms in each location or industry. We find that policies are missing the mark if they are indeed intended to target areas of distress or particular industries.

The role of industrial diversity in economic resilience: An empirical examination across 35 years

As recovery from the Great Recession continues, economic development scholars and practitioners are again focused on the pace and the sustainability of recovery, as well as on efforts to minimise the severity of future downturns. This paper contributes to the literature by exploring the relationship between industry diversity and economic resilience over time. Using fixed effects models with data from the Bureau of Labour Statistics and the Census Bureau, the paper examines the influence of industrial diversity and concentration on unemployment rate stability in Ohio counties between 1977 and 2011. Results indicate that while more concentrated counties had lower unemployment rates when times were good, counties with more diverse industry structures fared better during times of national or local employment shocks. The paper also finds that there is a relationship between concentration in particular industries and the ability to withstand a shock changes over the 35 years examined, thus highlighting the need to take care when interpreting findings over shorter periods and the need to consider the particular industry of dependence. While local policymakers have little ability to affect industrial concentration in the short run, the paper recommends that highly concentrated counties adopt policies that may help buffer their economies to effects of negative shocks.