Industrial Development Groups, External Connections, and Job Generation in Local Communities

Local industrial development groups have grown rapidly in numbers and visibility around the nation as communities seek to promote economic development. The external connections of these groups include the network of contacts among local development groups and other organizations with a stake in industry vitality and economic prosperity in a community or region. Using survey data from directors of industrial development groups in 20 states, we test the hypothesis that growth promotion groups that actively maintain extensive connections are more successful in generating new jobs than more isolated organizations. Our findings provide evidence of the importance of external connections in community job creation while controlling for numerous other factors internal to the local industrial development groups themselves and several location features.