Industrial Development Groups,Organizational Resources,and the Prospects for Effecting Growth in Local Economies

Using data from a survey of directors of not-for-profit industrial development groups in the United States and from a variety of secondary sources, we test the hypothesis that the presence of an active industrial development group was a significant factor in the economic growth of its service area over the 1977-to-1982 period. The data permit us to control for different levels of organizational resources among growth promotion groups as well as other traditional factors of local economic change in a regression analysis. While growth promotion groups are judged to be effective in terms of the number of jobs that are created or preserved relative to their direct expenditures of resources, neither their presence nor the levels of their organizational resources are significantly related to service area net employment change. The efforts of growth promotion groups are simply overwhelmed in importance by factors such as population size, metropolitan accessibility, location in a growth region, and manufacturing wage rates that characterize the respective service areas.