Peer-Reviewed Journal Details
Mandatory Fields
Credit K.;van Lieshout E.
The pandemic economy: Exploring the change in new business license activity in chicago, usa from march – september, 2020
Optional Fields
Since its emergence in 2019, the worldwide spread of the novel coronavirus SARS-CoV-2 (COVID-19) has created a vast economic crisis as government lockdowns place considerable strain on businesses of all kinds – particularly those that rely on face-to-face contact, such as retail restaurants, and personal services. Given the importance of these businesses to local economic development and urban vitality, this paper makes use of the point-level Chicago Business License dataset to examine the impact of the COVID-19 pandemic on new business activity in the City of Chicago. The results indicate that on average, from March to September 2020, total monthly new business starts have declined by 33.4% compared to the monthly average of new starts in the City from 2016 to 2019. Food service and retail businesses have been hardest hit during this period, while chains of all types have seen larger average declines in new startup activity than independent businesses. These patterns also demonstrate interesting intra-urban spatial heterogeneity; ZIP codes with the largest resilience to pandemic-related drops in new business activity tend to have more dense, diverse, and walkable built environments, lower levels of social vulnerability, lower percentages of young residents, and higher percentages of Black and Asian (non-Hispanic) residents. These findings provide some useful evidence in support of the “15-minute city” and ethnic enclave resilience hypotheses. Interestingly, observed COVID-19 case rates also appear to have a positive relationship with new business resilience for new chain and food service establishments. This is likely due to the fact that neighborhoods with relatively high levels of new food service business activity also have relatively higher proportions of food service employees, who are more at risk for contracting COVID-19 as “essential” workers.
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