The role of networks in urban renewal and the growth chances of firms

This research investigates the configuration of social ties and analyses it impact on a community in an inner-city neighborhood in Baltimore. I seek to answer two questions. Do social ties contribute to neighborhood improvement? Do these network ties improve the growth chances of small businesses resident there?; First, I employ a sociological analysis of embeddedness, and explore its effects on neighborhood renewal in an urban white working class community. I use an interdisciplinary approach integrating a census-based socio-historical research and ethnographic methods. I argue that a community identity embedded in racial and class antagonisms can accentuate the negative effects of ethnic solidarity. This may explain how previous generations of entrepreneurs in this community were constrained by a preexisting structure of social relations oriented towards the textile mills. I trace the historical events that led to the neighborhood decline and investigate through my ethnography the transition that allowed the incorporation of a new merchant group into the community.; The second part involves a statistical analysis of the effects of network ties (in the Hampden Village Merchant's Association) on the growth chances of the respective small firms in the community. Using a socio-centric snow-ball sample of small businesses, I measure trustfulness and trustworthiness separately. This design differs from egocentric survey designs where only trustfulness is measured and its perfect symmetry with trustworthiness is assumed. I analyze the effects of network measures (multiplexity, density, and centrality) on trustfulness and trustworthiness. Subsequently, I examine the effects of trustworthiness and trustfulness on the growth chances of these firms. Results of regression models estimated by OLS method indicate that multiplexity, which measures the number of roles in which an entrepreneur is involved in the community, positively affects trustworthiness. Centrality in entrepreneurial networks positively affects trustfulness and trustworthiness. Being more trustful is more important than being trustworthy in predicting better growth chances for these firms, controlling for age of firm, education and previous occupational experience. Thus, my findings suggest that trustfulness and trustworthiness are conceptually distinct. In conclusion, network ties, mediated through trust relations improve the growth chances of small firms.