The Dot-Com Boom and Bust in the Context of Regional and Sectoral Changes

Abstract

This paper examines the effects of the dot-com boom and bust on firm survival, migration and growth in other sectors. Dot-com expansion revived a slowing central city economy but also raised issues regarding displacement of manufacturing, distribution, social services and other non-profits from San Francisco's “South of Market”. This study uses the National Establishment Time Series (NETS) database to examine how the growth of dot-com businesses affected San Francisco and surrounding counties. We find that start-ups were central to San Francisco's job growth. Relocations also were a significant aspect of job change. Dot-com growth was positively associated with propensity for pre-boom information and professional services establishments and for non-high-tech manufacturing or distribution establishments to move, while arts, social services and non-profits remained in the city.