Local Capitalism and Civic Engagement: The Potential of Locally Facing Firms

The twin forces of globalization and devolution have created administrative circumstances that strain the problem-solving capacity of local governments and increase the importance of nongovernmental processes and institutions. The literature suggests that locally owned firms are more likely to engender higher levels of civic engagement critical to buttressing that problem-solving capacity. This research adds an additional dimension, investigating to whom those firms sell and through which supply channels. Using survey results from hundreds of local firms across five study sites, this research demonstrates that locally facing firms-that is, firms that intentionally interface with community members and other local businesses-are associated with greater levels of civic and political engagement compared with locally owned firms that sell their products to customers elsewhere. Findings suggest that local governments should look beyond the local/nonlocal ownership binary to consider how private firms can be partners in serving and supporting their communities.