Third Places and Neighborhood Entrepreneurship: Evidence from Starbucks Cafés

Jinkyong Choi, Jorge Guzman and Mario L. Small

No 32604, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Sociologists have shown that “third places” such as neighborhood cafés help people maintain and use their network ties. Do they help local entrepreneurs, for whom networks are important? We examine whether the introduction of Starbucks cafés into U.S. neighborhoods with no coffee shops increased entrepreneurship. When compared to census tracts that were scheduled to receive a Starbucks but did not get one, tracts that received a Starbucks saw an increase in the number of startups of 9.1% to 18% (or 2.9 to 5.7 firms) per year, over the subsequent 7 years. A partnership between Starbucks and Magic Johnson focused on underprivileged neighborhoods produced larger effects. Several analyses suggest the effect occurs through a networks mechanism.

JEL-codes: L26 R23 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-sbm and nep-ure
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