Key Studies: Why Local Matters

In recent decades, policy across the country has privileged the biggest corporations. Yet a growing body of research is proving something that many citizens already know: small-scale, locally owned businesses create communities that are more prosperous, entrepreneurial, connected, and generally better off across a wide range of metrics. Here’s a roundup of the important findings that are putting numbers to the harms of bigness and the benefits of local ownership, and that policymakers can use to craft better laws, business owners can use to rally support, and citizens can use to organize their communities.

For ease of use, we’ve organized these studies into the following categories, although they do not all fit neatly into one category. For additional studies specifically on big-box retail, see our Big-Box Toolkit. See also the book Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses for a look at the far-reaching impacts of large retail chains and the advantages that accrue to communities that opt for locally owned, independent businesses instead.

  • Start-Ups These studies find that as the economy has become dominated by fewer and larger companies, there’s been a sharp decline in the formation of new businesses.
  • Inequality These studies find that the increasing size of corporations is driving inequality, while local and dispersed business ownership strengthens the middle class.
  • Economic Returns These studies find that local businesses recirculate a greater share of every dollar in the local economy, as they create locally owned supply chains and invest in their employees.
  • Jobs These studies show that locally owned businesses employ more people per unit of sales, and retain more employees during economic downturns, while big-box retailers decrease the number of retail jobs in a region.
  • Wages and Benefits These studies show that locally owned businesses are linked to higher income growth and lower levels of poverty, while big-box retailers, particularly Walmart, depress wages and benefits for retail employees. Studies in this section also quantify the costs of these big companies’ low wages to state healthcare programs and other forms of public assistance.
  • Social and Civic Well-Being These studies find that a community’s level of social capital, civic engagement, and well-being is positively related to the share of its economy held by local businesses, while the presence of mega-retailers like Walmart undermines social capital and civic participation
  • Public Subsidies These studies document the massive public subsidies that overwhelmingly favor big businesses and have financed their expansion, and how this subsidized development has failed to produce real economic benefits for communities.
  • Taxes Building on the studies included in the previous category, “Public Subsidies,” these studies examine the differing impacts of locally owned businesses and big-box retailers on public finances. They find that large retailers systemically tilt the playing field in their favor by skirting their tax obligations, as well as that locally owned enterprises generate more tax revenue for cities, with less cost, than sprawling big-box shopping centers.
  • Existing Businesses These studies demonstrate how big-box retailers have significant negative effects on the number and vitality of nearby local businesses, in that they both lead to a loss of existing businesses, and contrary to the claims big-box retailers themselves often make, do not serve as a catalyst for new growth.
  • Consumers & Prices These studies find that chains are not always a bargain.