Economic Development Quarterly

The W.E. Upjohn Institute for Employment Research is home to Economic Development Quarterly (EDQ). EDQ is a peer-reviewed journal dedicated to publishing and bringing to the attention of policymakers, decision makers, and researchers the latest quality research findings in economic development.

Upjohn’s mission, vision, and core values of providing unbiased quality research in the areas of employment policy, labor market analysis, and economic and workforce development initiatives closely align with that of EDQ’s mission to promote research supporting the formulation of evidence-based economic development policies, programs, and practices.

We invite you to browse our most current issue, and encourage authors to submit research to EDQ in the areas of Economic Development Theory, Location Theory, Economic Development Finance, Foreign Trade, Economic Development Incentives, Industry Studies, State and Local Economic Development Policy, Labor Economics and Workforce Policy, and Urban and Regional Economies. For questions or additional information please contact: George Erickcek, Co-Editor; Timothy J. Bartik, Co-Editor; Shawn Rohlin, Co-Editor; or Claudette Robey, Managing Editor, or phone EDQ at 269-385-0469.

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Latest Research Featured in Economic Development Quarterly

May 2024; volume 38 issue 2

The contents of the May issue of Economic Development Quarterly highlights the fact that economic development has become a multifaceted field of study. For example, while business incentives are still a major component of economic development, questions about their impact have expanded to include the impact on residents. In addition, consumer and business services that were previously deemed outside the interest of economic development are increasingly becoming the subject of more careful study.

The latter point is made clear in Lanford, Thomas, and Feldman’s paper “Banking for the Other Half: The Factors That Explain Banking Desert Formation,” which explores the reasons why commercial banks underserve high minority areas. Pulling together panel census-tract data for the entire state of North Carolina from 2012 to 2019, the authors, using more sophisticated spatial measures than previous studies, find both profitability and racial discrimination play a factor in limiting bank accessibility in high minority areas. Profitability is associated with median household income, population density, and small business activity while discrimination is associated with minority population. The authors found that a $7,600 increase in median household income was associated with the opening of a new bank branch, while an 0.1% increase in the proportion of Hispanic residents is associated with the shutting down of a bank branch. A drop in an area’s median household income is also associated with an increased likelihood that it will become a banking desert having minimal access to banking services.  While electronic banking may increase the presence of banking services in low-income and Hispanic neighborhoods, it will not make up for the loss in beneficial relationships between lenders and borrowers that can promote economic development.

As mentioned above, economic development incentives have been carefully evaluated over the year, but now their potential negative impact on residents is being researched. Kim, in his “Assessing the Effects of Place-Based Policy on Spatial Inequality and the Distribution of Household Income: Evidence from Tax Increment Financing,” explores whether using TIF financing has an impact spatial income inequality. Using 24 years of data in Cook County, Illinois (Chicago), Kim finds that TIFs are associated with modest beneficial distributional effects when compared to similar untreated control neighborhoods; however, their use do not significantly move the impact areas up the income rankings in the region.

Choi and Nguyen-Hoang also examine TIF in their paper, “The Impact of Tax Increment Financing on Business Entries and Exits in Iowa,” but their focus was on TIF’s impact on the growth of business establishments. Using data from Johnson (Iowa City) and Polk (Des Moines) counties, from 1990 to 2017, the authors were able to geocode nearly 50,000 permitted establishments, just over 13,000 blocks for the 28-year period. Overall, they found no statistically significant evidence that TIFs increased the number of total establishments or business entries; however, they did find that TIFs significantly reduce business exits. On the county level, TIFs had a positive effect on the number of establishments in Johnson County, while reducing the number of businesses exiting in Polk County. Finally, retailers were the most impacted, while the number of manufacturers in the TIFs remained statistically constant.

Sanchez and Qian, in their paper, “Come Together, But How? Zooming Into Economic Development Collaboration Between State and Local Governments, and Nongovernmental Organizations,” examine the type of economic development programs generated by state and local agreements. Again, turning to Iowa, the authors used a unique database containing information on state-local economic development agreements signed between 2007 and 2018. State law in Iowa requires the filing of all agreements between local units of governance and state-level agencies with the Iowa Office of the Secretary of State. Using this untapped database, and following guidelines established in part by the International Economic Development Council, the authors categorized the agreements into eight economic/workforce development areas. Workforce development agreements accounted for 57.5% of the 120 agreements tracked.  A weak second was the funding for local marketing campaigns. In addition, the most common partnership uncovered in the database was between the state and local nonprofit organizations.

The issue also provides a commentary by Finio, Li Fang, Pendergrast, and Knaap, which addresses the need for better data on businesses owned by Black, indigenous, and people of color (BIPOC).  In their commentary, “Data on Black, Indigenous, and People of Color (BIPOC)-Owned Businesses: What's Out There and What Can Be Done?”, the authors stress the importance of BIPOC-owned businesses on wealth generation and examined and critiqued existing data sets. In short, there are few geobased databases available on BIPOC-owned businesses. Moreover, those that are available have not been compiled in one place. Therefore, the authors present how a usable database could be built using government surveys (Quarterly Census of Employment and Wages, PPP data, Minority Business Enterprise Program); public tax, licensing, contracting, and administrative records; nonprofit and chamber of commerce lists; and private industry lists from Maryland. The commentary provides an extremely helpful step-by-step process on how to combine databases using different geographies and time periods, identifying the challenges in doing so.

Finally, the issue contains two book reviews. Slaper reviews The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies by Mariana Mazzucato and Rosie Collington. Wojan reviews Clean Air and Good Jobs: U.S. Labor and the Struggle for Climate Justice by Todd Vachon.