Are minority-owned businesses moving to suburbs? Intrametropolitan spatial shifts and their causes

Abstract

It is well documented that the U.S. metropolitan areas have experienced significant spatial, economic and demographic changes with increasing minority and immigrant population living in the suburbs. At the same time, minority-owned businesses saw substantial growth over the years and play important roles in local economic development. Using data from the 2007 and 2012 Survey of Business Owner, we trace the intrametropolitan location shifts of minority-owned businesses (including black-, Asian-, and Hispanic-owned) for 60 metropolitan areas and their performances in cities and suburbs over time through descriptive analysis. We find that minority-owned businesses had a strong presence in the suburbs but have grown faster in the central counties. They hired about 20–23% of total central area workforce and about 15–17% of total suburban workforce during this time period. Black-owned businesses remain the least suburbanized of all groups Suburban firms in general outperform their central city counterparts. Using regression analysis, we test a series of demographic, economic, and policy factors as potential causes of business spatial change and find the strong impact of co-ethnic population’s presence in a community for the growth of their respective businesses.