Black-owned neighborhood
businesses are assets to the community
Commonly reported outcomes like household income, educational attainment, and unemployment rates are often analyzed to assess the economic resiliency of a community. These outcomes are helpful for understanding family economic security at the neighborhood level. However, they often overlook the ways systemic economic exclusion of Black communities, through public policies and practices that reinforce structural barriers to wealth creation, can have widespread effects. This includes systemic racial bias in access to business capital in the public and private sectors.14 Moreover, Black-owned businesses are frequently located in disinvested areas, which can be perceived as higher risk by lenders. This geographic bias contributes to the challenges in accessing capital.15
Studies rarely consider the implications of Black-owned businesses as social, economic, and cultural assets that may shape community well-being, but a few have observed the spill-over effect that small businesses can have on their surrounding neighborhoods. For example, neighborhood businesses have been shown to improve community health equity outcomes in historically Black neighborhoods.16 Research shows that evaluations of neighborhood resources, such as local businesses, are linked to residents’ perceptions of their neighborhood and overall well-being.17 Investments in the growth and preservation of neighborhood businesses have also been shown to improve community safety.18 Additionally, places with a higher proportion of local small businesses demonstrate increased per capita income growth and accelerated employment growth.19 Lastly, regions with a higher prevalence of small businesses experience lower levels of income inequality.20
Black-owned small businesses make vital contributions to the culture that influences a neighborhood. These businesses serve as landmarks, gathering spots, and necessary amenities for the community’s residents. In our interviews with Black-owned business owners, the phrase “assets to the community” was used consistently. This embodies how small Black-owned business owners view their relationships with the neighborhoods that they serve.
Those who start and operate businesses throughout Atlanta’s neighborhoods often live and work within the same community, stating that their business fills a gap or need in services. Despite the ongoing market pressures that make it difficult to open and sustain businesses in Atlanta’s neighborhoods, Black business owners have a strong desire to leverage their businesses as community assets.
This brief builds on the emerging research and recognizes that small, Black-owned businesses are critical neighborhood assets while also considering a more comprehensive and place-based understanding of the impact Black-owned businesses have on neighborhood well-being.21
The Analysis
The analysis uses the United Way of Greater Atlanta’s Child Well-Being Index22 as a dependent variable to examine the relationship between Black-business representation and neighborhood well-being. We employ the Child Well-Being data as a measure of neighborhood well-being because the scores are generated using data on youth and adult outcomes in health, education, and economic security at the census tract level. The higher the Child Well-Being score, ranging from zero to 100, the more positive the outcomes. A complete list of data points used to construct the Child Well-Being Index can be found in the appendix of this brief.
The independent variable is the number of Black-owned small businesses per 1,000 Black residents, representing the density of Black-owned businesses relative to the share of Black residents in the City of Atlanta neighborhoods. Business-level data was retrieved from Dun & Bradstreet Holdings, Inc. and delivered in a format that includes the racial and ethnic identity of the firm owner, revenues, employee size, and more. We filtered the business dataset to include only those we define as small Black-owned businesses (20 or fewer employees). We geocoded the business-level data to include a corresponding census tract for each business address. Businesses were then organized by census tract and matched to the tract’s Child Well-Being score. Once the data was cleaned and outliers were removed, we analyzed Child Well-Being scores and Black business representation across 130 census tracts in the City of Atlanta.
An ordinary least squares (OLS) regression was performed to estimate the relationship between two variables, where the dependent variable Y is the Child Well-Being score and the independent variable X is the number of Black-owned small businesses per 1,000 Black residents. The result is visualized below.
For each additional Black-owned small business per 1,000 Black residents, the Child Well-Being score is expected to increase by approximately 1.8 points.
This indicates a statistically significant positive relationship between the density of Black-owned businesses and child well-being in Atlanta’s neighborhoods. To put it into perspective, this translates to an approximate 4 percent increase in the Child Well-Being score for each additional Black-owned small business per 1,000 Black residents.
This finding suggests that an increase in the number of Black-owned businesses may be associated with improved neighborhood well-being in Atlanta. While more research is necessary to unpack which specific dimensions of child well-being (employment rates, educational attainment, etc.) are most affected by Black business representation at the neighborhood level, this relationship highlights the potential broader social and economic benefits of supporting the preservation of small Black businesses in neighborhoods. However, market pressures that stimulate displacement, coupled with too few policy protections, threaten the relationship.
