Research

In this paper, we demonstrate that the presence of entrepreneurial organizations, proxied by young and small firms, in an economy increases its resilience to external shocks. We estimate the effect of local young and small firm employment shares on employment growth through extreme weather events in US counties using an event study model. We find that higher employment shares of young and small firms reduce employment losses for given levels of property damages. We contribute to the literature by showing that entrepreneurship enhances economic resilience to physical climate shocks at the local level. As regional resilience can be considered a public good, our findings add an argument to the case for supporting young and small firms in the face of progressing climate change.  

The economic costs incurred by extreme weather events are substantial and increasing. In this study, we demonstrate how community banks – a type of financial institution with strong local ties and customer relationships – mitigate these costs at the local level. We use an event study model to demonstrate that US counties with higher community bank market shares experience fewer employment losses through extreme weather events. We then use bank-level analyses to demonstrate the mechanism – the small business credit supply. Community banks maintain their lending following extreme weather events, while other banks reduce it. These findings provide novel evidence on how local financial institutions strengthen economic resilience through extreme weather events. As policymakers develop strategies to mitigate the effects of extreme weather events, local finance may be a solution.

Minority-owned banks have missions to promote the economic growth and resilience of minorities in their communities that often fare poorly relative to other community members. We analyze the extent to which minority-owned banks may achieve their missions, the economic and financial conditions over which they may succeed, and how they might accomplish these missions. The relationship lending, finance-growth nexus, and economic resilience literatures suggest if, when, and how these missions might be achieved, and we apply the tools of these literatures to minority owned banks. Minority-owned banks may have advantages in soft-information-based lending; might promote local economic growth over essentially all conditions; or could alleviate distress primarily during crises. We collect and analyze bank and county data for 2006-2020. Results suggest minority-owned banks improve economic resilience in their communities during the Global Financial Crisis (GFC) through increased small business lending, but few benefits are found during normal times or the COVID-19 crisis. Our results are robust and stand up to treatments of identification concerns, including propensity score matching (PSM) and instrumental variables (IV). These findings are also consistent with predictions of the relationship lending and economic resilience literatures, but not those of the finance-growth nexus research.

We estimate the effect of opioid use rates on local economic resilience through changes in industrial composition. We find regional opioid use rates adversely affect firm growth in general, with the greatest impact on small firms. Our results are robust to several identification strategies (Difference in Differences, Propensity Score Matching, and Instrumental Variables) and alternative empirical specifications. Our findings establish that local industrial composition and long-term resilience are each adversely affected by the opioid public health crisis.

Banks are one of the key drivers of economic development across communities. Banking deserts, defined by inadequate banking access, limits access to capital, inhibits wealth accumulation, and increases exposure to predatory lending. Banking desert formation could be profit-driven, with lower income and less densely populated regions more likely to become banking deserts. Discrimination could also play a role here; banks may avoid areas with higher minority populations. We use a panel, census-tract level dataset for the entire state of North Carolina to investigate how these forces impact banking access and banking desert formation. Consistent with the profit mechanism, our findings indicate household income and population density are the primary drivers of both banking access and banking desert formation, however the proportion of minority residents does play a role. These results highlight the need for policies that mitigate bank branch losses in underserved neighborhoods.

Community banks have a unique capacity to strengthen economic resilience by alleviating local firm credit constraints during economic downturns. We provide evidence that banking access and community bank market share affected both the county-level timing and duration of the Great Recession in the United States. Using the Cox Proportional Hazards and Heckman Selection models, we find that communities with a higher community bank market share are less likely to experience recession conditions, conditional on local bank health. This suggests community banks have unique institutional structures, allowing them to continue providing funds to firms through economic downturns. This research demonstrates that local financial institutions affect economic resilience, in particular the timing and duration of recession conditions.

Identifying potential sites for firm relocation or expansion is a negotiated process that involves both firms and localities. Some firms focus on profit enhancement through cost minimization, while others seek qualities that maximize talent attraction and benefit corporate identity. Simultaneously, localities seek to maximize the economic welfare for residents through job creation and place-based economic development strategies. The purpose of this work is to examine how localities use place promotion strategies to attract relocating or expanding firms based on analysis of proposals submitted by communities in response to the 2017 Amazon HQ2 Request for Proposals. Our results support literature streams that argue quality of life and talent attraction, as well as cost are priorities for place-based economic development strategies. We present a complete picture of place promotion strategies that localities use to differentiate themselves and avoid competing only on cost in the competitive marketplace of corporate recruiting.

Extreme weather events are becoming more common and have significant health impacts on local residents. Injuries caused by these events may drive demand for pain-relieving medications.  In addition, the US remains in the midst of an opioid overdose crisis, with an unprecedented number of Americans relying on opioid use disorder (OUD) medications, such as buprenorphine, to manage symptoms of OUD. At the same time, inclement weather makes delivering supplies, such as medication, more challenging. This study evaluated the effects of extreme weather events on supplies of opioid medications. We used an event study model to demonstrate extreme weather events cause temporary decreases in shipments of several types of opioids: buprenorphine, methadone, hydrocodone, morphine and oxymorphone. These results indicate extreme weather events may disrupt treatment for OUD as well as for those experiencing extreme pain. These results point to an additional cost of extreme weather events: disruption of OUD and pain treatment.

There is unmistakable evidence of increased NIH funding for pediatric and perinatal research, but there is much work to be done. To further promote NIH-funded pediatric and perinatal research, we advocate for a life-cycle approach in which the return on the investment continues over the lifespan. Although elected policymakers have short-time horizons, pediatric and perinatal researchers must provide novel evidence and theoretical arguments demonstrating the long-term health benefits for the adults of tomorrow by improving the health of our current pediatric populations. Child health researchers must communicate the role of early developmental events on childhood and adult disease, including those that are prenatal and gestational so that its importance is understood by the public and policymakers.

Research universities rely heavily on external funding to advance knowledge and generate economic growth. In the USA, tens of billions of dollars are spent each year on research and development with the federal government contributing over half of these funds. Yet a decline in relative federal funding highlights the role of other funders and their varying contractual terms. Specifically, nonfederal funders provide lower recovery of indirect costs. Using project-level university-sponsored research administrative records from four institutions, we examine indirect cost recovery. We find significant variation in the amount of indirect funding recovered—both across and within funders, as well as to different academic fields within a university. The distribution of sponsors in the overall research funding portfolio also impacts indirect cost recovery. The recovery variation has important implications for the sustainability and cross-subsidization of the university research enterprise. Together, our results show where universities are under-recovering indirect costs.

In this article, we examine the status of the National Institutes of Health (NIH) pediatric research portfolio between start of federal fiscal year (FY) 1992 and end of FY 2015. The NIH experienced the greatest mean annual growth rate during the “doubling era” (FY 1998-2003): both the NIH budget (13.5%) and pediatric research portfolios (11.5%) increased annually by double digits. However, in the “postdoubling” era (FY 2004-2009), both the NIH (2.0%) and pediatric (−0.2%) mean annual growth rates decreased dramatically. In the most recent era (FY 2010-2015), the NIH mean annual growth rate has been flat (−0.1%) and pediatric research funding has posted very modest gains (3.5%) without accounting for 1-time increases under the 2009 American Recovery and Reinvestment Act. We offer recommendations to protect against further erosion of the pediatric research portfolio because continuation of these trends will have a negative effect on the health of children during their childhood and as adults. As capacity to conduct basic and applied research is further constrained, it will be a challenge for pediatric researchers to do more with less and less.

The amount of federal dollars allocated to improving the health of our pediatric population can serve as an indicator of the priority placed on child well-being. Although Congress has established novel mechanisms that marginally increase pediatric research funding, the pediatric research portfolio is facing an increasingly uncertain fate. This work examines pediatric, perinatal and pediatric research initiative (PRI) spending using data collected by the NIH that uses the novel research, condition and disease categorization system. Further, this work reports on recent policy developments in pediatric biomedical research and offers recommendations to insulate this portfolio from future uncertainty. Federal support for pediatric research has declined with average annual growth rates of NIH pediatric spending dropping from 12.8% (FY 1998-2003) to 1.7% (FY 2004-2015). After taking into account Biomedical Research and Development Price Index growth, the pediatric research portfolio’s purchasing power has declined by 15.9% (FY 2004-2015). Federal support for pediatric biomedical research has plateaued in nominal terms and declined significantly in real terms. Future congressional action will be necessary to protect gains and to expand the capacity of the pediatric portfolio.