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Entrepreneurship and crime: The case of new restaurant location decisions ✩

Research paper by CarlyWill Sloan, Steven B. Caudill, Franklin G. Mixon Jr.

Indexed on: 14 Mar '16Published on: 01 Jan '16Published in: Journal of Business Venturing Insights



Abstract

This paper examines the impact of various violent crimes on restaurant location decisions in a single city, Memphis, TN. Using location information on crimes and newly opened restaurants, we are able to match crimes and restaurants in parcels we construct. We examine the impact of the number of burglaries, assaults, rapes, and murders in each of 400 to up to 1,000,000 parcels occurring from 2009–2013 on the number of restaurants opening in 2014 in models including dummy variables capturing neighborhood effects. Regression results indicate that each crime is positively related to the number of new restaurants in a parcel. This suggests that even with the crime problem, these locations provide sufficient benefits, perhaps population density, which make them attractive to restaurant entrepreneurs.