Hate Crimes and Minority-Owned Businesses

Abstract

This article estimates effects of hate crimes on the number of Black-owned firms, Hispanic-owned firms, Asian-owned firms, Asian Indian–owned firms, and White-owned firms. Using county data for Kentucky, the number of all minority-owned firms was found to decrease in counties with more hate crimes. No effect on White-owned firms was found due to hate crimes. The finding that the number of minority-owned businesses declines in response to the number of hate crimes was robust to spatial estimation techniques. Spatial error method (SEM) and spatial autoregressive (SAR) model estimates found impacts similar to the ordinary least squares estimates even where spatial dependence was present. The negative impact hate crimes are found to have on the number of minority-owned businesses implies that policies to fight hate crimes should lead to increased economic development.