#347. Local Ownership

Posted on | The Agurban

Local Ownership

A recent report, Does Local Firm Ownership Matter?, by The Northeast Regional Center for Rural Development, located at The Pennsylvania State University in University Park, PA, examined simultaneously two key variables: firm size and resident/non-resident ownership.

Two fundamental conclusions were reached as a result of the study:

– Medium and large-sized firms (100-499 workers and over 500 workers, respectively) owned by non-residents reduce local economic growth rates.
– Resident-owned small firms (10-99 employees) have a large positive effect on local income growth.

The authors conclude: “While larger, non-resident owned firms may offer opportunity for jobs, they apparently do so at the cost of reduced local economic growth. Small firms owned by residents are optimal if the policy objective is to maximize income growth rates.”

For the complete report, visit here.