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Abstract
Local, small businesses are very much tied to their surrounding communities. Therefore, when neighborhoods undergo meaningful economic and social changes, such as those that take place under gentrification, one would expect local businesses to feel the effects. Is gentrification, however, a threat or a boon for existing businesses? What are the implications for the residents who patronize these services? I test these questions here, using microdata on properties and businesses in New York City. I also drill down to three illustrative case neighborhoods, which reveal nuance beyond the average citywide effects. The results are mixed and show that gentrification is associated with both business retention and disruption. I find that most businesses stay in place, and displacement is no more prevalent in the typical gentrifying neighborhood than in nongentrifying neighborhoods. When businesses do leave gentrifying neighborhoods, however, the spaces tend to sit vacant for relatively longer periods of time than they do in nongentrifying neighborhoods. Gentrifying neighborhoods are more likely to attract new types of services than are nongentrifying and higher-income neighborhoods, and they more often attract multiple-establishment businesses (chains) to replace displaced businesses. As the neighborhood drill-downs show, however, cases still exist in which neighborhoods undergoing gentrification lose businesses without the upside of new amenities.
Introduction
Much of the literature on gentrification has focused on how it affects residents and housing. We know, however, that the nature and quality of neighborhoods, especially those in urban settings, are also determined by the commercial enterprises that serve the community. The "corner store," an emblem of local retail, has long played an important economic and cultural role in neighborhood development and livelihood (Liebow, 1967). Retail services, particularly in mixed-use settings, not only provide material needs for those living nearby, but less-tangible social and cultural capital as well (Deener, 2007; Hyra, 2008; Zukin et al., 2009). Therefore, it follows that, when neighborhoods undergo meaningful economic and social changes like those that transpire under gentrification, implications surely exist for the local business environment. These potential changes are important not only for the business proprietors but also for the residents who patronize their services and consume their goods.
We know that business location decisions and their subsequent survival are a function of the existing (and potential) consumer...