According to economic geography literature, the success of firms is affected by the local context, in particular when firms are socio-spatially embedded. We expect this effect to be stronger when firms face an increase in local disorder. We analysed data on 344 firms (active in retail, eating and drinking establishments, personal services and private education, business services, cultural activities, manufacturing and building) in 108 Dutch residential neighbourhoods, and data on the changes in social and physical disorder of those neighbourhoods, to examine firm success determinants. We find that it is not the degree of disorder that matters to local firms turnover, but rather recent changes in local disorder. More in particular, we find that local firm turnover is negatively affected by an increase in local disorder, but only when a firm depends on daily visits from predominantly local customers. Our results suggest that physical and social local interventions to create safe and clean public spaces will indirectly positively influence local firms and subsequently, the neighbourhood economy. This spill-over effect is promising for both residents, who benefit from local amenities and local ‘buzz’, and local entrepreneurs, whose firm success is stimulated.
If the inline PDF is not rendering correctly, you can download the PDF file here.
AALDERS, R., BAKKEREN, A., KOK, J. and TWIGT, T. (2008), De kracht van de wijk. Belang van wijkeconomie voor de leefbaarheid in Amsterdamse krachtwijken, Amsterdam: Rabobank Amsterdam en Omstreken/EZ Amsterdam/MKB Amsterdam.
ALSOS, G. A., CARTER, S. and LJUNGGREN, E. (2014), ‘Kinship and business: how entrepreneurial households facilitate business growth’, Entrepreneurship and Regional Development, 26 (1–2), pp. 97–122.
BAILEY, N., BARNES, H., LIVINGSTONE, M. and MACLENNAN, D. (2013), ‘Understanding neighbourhood population dynamics for neighbourhood effects research: a review of recent evidence and data source developments’, [in:] VAN HAM, M., MANLEY, D., BAILEY, N., SIMPSON, L. and MACLENNAN, D. (eds.), Understanding neighbourhood dynamics: new insights for neighbourhood effects research, Dordrecht: Springer, pp. 23–42.
BAILEY, N. (2015), ‘The place of neighbourhood in entrepreneurship: attitudes, resources and sorting’, [in:] MASON, C., REUSCHKE, D., SYRETT, S. and VAN HAM, M. (eds.), Entrepreneurship in cities. Neighbourhoods, Households and Homes, Cheltenham: Edward Elgar, pp. 19–38.
BATHELT, H. and J. GLÜCKLER, J. (2003), ‘Toward a relational economic geography’, Journal of Economic Geography, 3, pp. 117–144.
BENZ, M. (2009), ‘Entrepreneurship as a non-profit-seeking activity’, International Entrepreneurship and Management Journal, 5, pp. 23–44.
BLACKBURN, R., HART, M. and WAINWRIGHT, T. (2013), ‘Small business performance: business, strategy and owner-manager characteristics’, Journal of Small Business and Enterprise Development, 20 (1), pp. 8–27.
BULTERMAN, S., VAN KLINK, V. and SCHUTJENS, V. (2007), ‘Ondernemers en hun bedrijven in de wijk: het cement voor de economische pijler’, [in:] VAN DIJK, J. and SCHUTJENS, V. (eds.), De economische kracht van de stad, Assen: Van Gorcum, pp. 129–144.
DAHL, M. S. and SORENSON, O. (2012), ‘Home Sweet Home: Entrepreneurs’ Location Choices and the Performance of Their Ventures’, Management Science, 58, pp. 1059–1071.
DAVIDSSON, P. (1991), ‘Continued Entrepreneurship. Ability, need and opportunity as determinants of small firm growth’, Journal of Business Venturing, 6, pp. 405–426.
DAVIDSSON, P., ACHTENHAGEN, L. and NALDI, L. (2010), ‘Small Firm Growth’, Foundations and Trends in Entrepreneurship, 6, pp. 69–166.
DE BOK, M. (2009), ‘Estimation and validation of a microscopic model for spatial economic effects of transport infrastructure’, Transportation Research. Part A, 43, pp. 44–59.
DELMAR, F. (1997), ‘Measuring growth: Methodological considerations and empirical results’, [in:] DONCKELS, R. and MIETTINEN, A., Entrepreneurship and SME Research: On Its Way to the Next Millennium, Aldershot, UK and Brookfield, VA: Ashgate, pp. 190–216.
DETIENNE, D., SHEPHERD, D. and DE CASTRO, J. (2008), ‘The fallacy of ‘only the strong survive’: The effects of extrinsic motivation on the persistence decisions for under-performing firms’, Journal of Business Venturing, 23, pp. 528–546.
ELLEN, I. G. and O’REGAN, K. (2010), ‘Welcome to the neighborhood: how can regional science contribute to the study of neighborhoods?’, Journal of Regional Science, 50, pp. 363–379.
FEIJTEN, P. and VAN HAM, M. (2009). ‘Neighborhood change… reason to leave?’, Urban Studies, 46, pp. 2103–2122.
FLORIDA, R. (2002), The rise of the creative class: And how it’s transforming work, leisure, community and everyday life, New York: Basis Books.
FOLMER, E. (2014), ‘Entrepreneurship in the neighbourhood: shifting patterns of economic activities in residential neighbourhoods in five Dutch cities’, Journal of Urban Affairs, 36 (4), pp. 742–759.
GILBERT, B. A., MCDOUGALL, M. M. and AUDRETSCH, D. (2006), ‘New venture growth: a review and extension’, Journal of Management, 32, pp. 926–950.
GLAESER, E. L., KOLKO, J. and SAIZ, A. (2001), ‘Consumer city’, Journal of Economic Geography, 1, pp. 27–50.
GRANOVETTER, M. S. (1985), ‘Economic action, Social Structure and Embeddedness’, American Journal of Sociology, 91, pp. 481–510.
HACKLER, D. and MAYER, H. (2008), ‘Diversity, Entrepreneurship, and the Urban Environment’, Journal of Urban Affairs, 30, pp. 273–307.
HUGGINS, R. and THOMPSON, P. (2012), ‘Entrepreneurship and community culture: a place-based study of their interdependency’, Entrepreneurship Research Journal, 2, Art. 4.
JOHANNISSON, B. (2011), ‘Towards a practice theory of entrepreneuring’, Small Business Economics, 36, pp. 135–150.
KANGASHARJU, A. (2000), ‘Growth of the smallest: Determinants of small firm growth during strong macroeconomic fluctuations’, International Small Business Journal, 19, pp. 28–43.
KELLEY, D., SINGER, S. and HERRINGTON, M. (2016), Global Entrepreneurship Monitor Global Report 2015/2016, Babson Park, MA, United States: Babson College, GERA.
KORSGAARD, S., FERGUSON, R. and GADDEFORS, J. (2015a), ‘The best of both worlds: how rural entrepreneurs use placial embeddedness and strategic networks to create opportunities’, Entrepreneurship and Regional Development, 27 (9−10), pp. 574–598.
KORSGAARD, S., MULLER, S. and TANVIG, H. (2015b), ‘Rural entrepreneurship or entrepreneurship in the rural between place and space’, International Journal of Entrepreneurial Behaviour and Research, 21 (1), pp. 5–26.
LANG, R., FINK, M. and KIBLER, E. (2014), ‘Understanding place-based entrepreneurship in rural central Europe: a comparative institutional analysis’, International Small Business Journal, 32 (2), pp. 204–227.
LEE, S. Y., FLORIDA, R. and ACS Z. J. (2004), ‘Creativity and entrepreneurship: A regional analysis of new firm formation’, Regional Studies, 38, pp. 879–891.
LOVE, L. L. and CROMPTON, J. L. (1999), ‘The role of quality of life in business (re)location decisions’, Journal of Business Research, 44, pp. 211–222.
MASON, C. M., CARTER, S. and TAGG, S. (2011), ‘Invisible businesses: The characteristics of home-based businesses in the United Kingdom’, Regional Studies, 45, pp. 625–639.
OINAS, P. (1998), ‘Exploring ‘the embeddedness of business firms’’, Chapter 3, [in:] The Embedded Firm, Helsinki: School of Economics and Business Administration.
RASPE, O., WETERINGS, A., VAN DEN BERGE, M., VAN OORT, F., MARLET, G., SCHUTJENS, V. and STEENBEEK, W. (2010), Bedrijvigheid en leefbaarheid in stedelijke wijken [Economic activity and livability in urban neighbourhoods], Den Haag: Planbureau voor de Leefomgeving.
REIJONEN, H. and KOMPPULA, R. (2007), ‘Perception of success and its effect on small firm performance’, Journal of Small Business and Enterprise Development, 14, pp. 689–701.
REUSCHKE, D. and VAN HAM, M. (2013), ‘Testing the ‘residential rootedness’ hypothesis of self-employment for Germany and the UK’, Environment and Planning A, 45, pp. 1219–1239.
REUSCHK E, D., MASON, C., SYRETT, S. and VAN HAM, M. (2015), ‘Connecting entrepreneurship with neighbourhoods and homes’, [in:] MASON, C., REUSCHKE, D., SYRETT, S. and VAN HAM, M. (eds.), Entrepreneurship in cities. Neighbourhoods, Households and Homes, Cheltenham: Edward Elgar, pp. 1–16.
RICH, M. A. (2013), ‘From coal to cool: The creative class, social capital, and the revitalization of Scranton’, Journal of Urban Affairs, 35, pp. 365–384.
RISSELADA, A. (2013), ‘Housing the mobile entrepreneur. The location behaviour for firms in urban residential neighborhoods’ PhD dissertation, Utrecht: Utrecht University.
RISSELADA, A. and FOLMER, E. (2012), ‘Planning the neighborhood economy: land-use plans and the economic potential of urban residential neighbourhoods in the Netherlands’, European Planning Studies, 21, pp. 1873–1894.
RISSELADA, A. and SCHUTJENS, V.A.J.M. (2017), ‘Firm location choice in the New Economy’, [in:] BONNET, J., DEJARDIN, M. and GARCIA PEREZ DE LEMA, D. (eds.), Exploring the Entrepreneurial Society: Institutions, Behaviors and Outcomes, Cheltenham: Edward Elgar.
SALVESEN, D. and RENSKI, H. C. (2002), The importance of quality of life in the location decision of new economy firms. Washington, DC: US Economic Development Administration.
SAMPSON, R. J., MORENOFF, J. D. and GANNON-ROWLEY, T. (2002), ‘Assessing ‘Neighborhood effects’: Social Processes and New Directions in Research’, Annual Review of Sociology, 28, pp. 443–478.
SANTARELLI, E. and VIVARELLI, M. (2007), ‘Entrepreneurship and the process of firms’ entry, survival and growth’, Industrial and Corporate Change, 16, pp. 455–488.
SCHUTJENS, V.A.J.M. and WEVER, E. (2000), ‘Determinants of new firm success’, Papers in Regional Science, 79, pp. 135–159.
STEENBEEK, W. and SCHUTJENS, V. (2014), ‘The willingness to intervene in problematic neighborhood situations: a comparison of local entrepreneurs and (un)employed residents’, Journal of Economic and Social Geography TESG, 105 (3), pp. 349–357.
SLEUTJES, B. (2012), ‘Neighbourhood effects on firm success and strategy’, PhD dissertation, Utrecht: Utrecht University.
SLEUTJES, B. and SCHUTJENS, V. (2013), ‘Anchoring of firms in the neighbourhood: Does local social and physical order affect local firms’ investment strategies?’ European Planning Studies 21: 1256–1275.
SLEUTJES, B., VAN OORT, F. and SCHUTJENS, V. (2012a), ‘A place for area-based policy? The survival and growth of local firms in Dutch residential neighbourhoods’, Journal of Urban Affairs, 34, pp. 533–558.
SLEUTJES, B., VAN OORT, F. and SCHUTJENS, V. (2012b), ‘Cohesion, liveability and firm success in Dutch neighbourhoods’, [in:] WELTER, F., SMALLBONE, D. and VAN GILS, A. (eds.), Entrepreneurial Processes in a Changing Economy, Frontiers in European Entrepreneurship Research, Cheltenham, UK: Edward Elgar Publishing, pp. 24–47.
STAM, E. (2009), ‘Entrepreneurship, Evolution and Geography’, [in:] Papers on Economics and Evolution, Jena: Max Planck Institute, pp. 1–22.
STOREY, D. J. (1994), Understanding the small business sector, London: Routledge.
TAMÁSY, C. (2006), ‘Determinants of Regional Entrepreneurship Dynamics in Contemporary Germany: A Conceptual and Empirical Analysis’, Regional Studies, 40, pp. 365–384.
TRETTIN, L. and WELTER, F. (2011), ‘Challenges for Spatially oriented Entrepreneurship Research’, Entrepreneurship and Regional Development, 23, 575–602.
VAN WILSEM, J., WITTEBROOD, K. and DE GRAAF, N. D. (2003), ‘Buurtdynamiek en slachtofferschap van criminaliteit [Neighborhood dynamics and crime victimization: a study on the effects of socio-economic improvement, decline, and stability in Dutch neighborhoods]’, Mens and Maatschappij, 78, pp. 4–28.
VAN WILSEM, J., WITTEBROOD, K. and DE GRAAF, N. D. (2006), ‘Socioeconomic dynamics of neighborhoods and the risk of crime victimization: a multilevel study of improving, declining and stable areas in the Netherlands’, Social Problems, 53, pp. 226–247.
VAN WITTELOOSTUIJN, A., DEJARDIN, M., HERMANS, J., RAMDANI, D., VANDERSTRAETEN, J., BRASSEY, J. and SLABBINCK, H. (2015), Fitting entrepreneurial, firm-level and environmental contingencies for better performance, Antwerpen: Belspo, Universiteit Antwerpen.
VÖLKER, B. and FLAP, H. (2000), The Survey on the Social Networks of the Dutch (first wave, SSND1). Data and Codebook, Utrecht: Utrecht University.
VÖLKER, B., FLAP, H. and MOLLENHORST, G. (2008a), The Survey on the Social Networks of the Dutch (second wave, SSND2). Data and Codebook, Utrecht: Utrecht University.
VÖLKER, B., SCHUTJENS, V. and MOLLENHORST, G. (2008b), The Survey on the Social Networks of Entrepreneurs. (first wave, SSNE1). Data and Codebook. Utrecht: Utrecht University.
VÖLKER, B., MOLLENHORST, G. and SCHUTJENS, V. (2013), ‘Neighborhood social capital and residential mobility’, [in:] VAN HAM, M., MANLEY, D., BAILEY, N., SIMPSON, L. and MACLENNAN, D. (eds.), Understanding neighborhood dynamics: new insights for neighborhood effects research, Dordrecht: Springer, pp. 139−160.
WIKLUND, J. (1998), ‘Small firm growth and performance: entrepreneurship and beyond’, PhD dissertation, Jönköping: International Business School.
WILLIAMS, N. and HUGGINS, R. (2013), ‘Supporting entrepreneurship in deprived communities: a vision too far?’, Journal of Small Business and Enterprise Development, 20 (1), pp. 165–180.