Visibility is normally something entrepreneurs strive for. After all, the more people know about their business, the more likely it is to grow. Research from Iowa State University highlights that things aren’t so straightforward in developing countries, however, as greater visibility might make entrepreneurs more likely to be victims of crime.
The researchers quizzed a group of Mexican entrepreneurs, each of whom had been victims of crime. They also trawled through survey data from nearly 90,000 registered businesses.
An active target
“Sometimes criminals just seize an opportunity. But as the severity of the crime goes up, they really know what they are doing. They’re paying attention to routines and how the business operates,” the researchers explain.
For instance, bank transactions were found to be a particularly strong attractor for criminals, with the likelihood of attack growing as the business became more profitable. Indeed, so grave was this threat that some businesses relocated or even strived to become less commercially successful. The practice of restricting growth was especially common among those who either were victims or suspected they would be targeted by thieves in a bid to make them seem less attractive.
By contrast, those who were victims of extortion or aggravated robbery were more inclined to try and relocate their business in the hope that this would allow their business to grow again free from such a risk.
The researchers hope that their work reminds policymakers that crime can have a considerable impact on the willingness of entrepreneurs and business owners to create businesses, with the inevitable consequences of that on things like jobs and taxes.
“Sadly, as we were conducting this research, one of the entrepreneur participants scheduled for an interview was killed by criminals one day before our planned meeting,” the authors conclude. “This incident hit home for us, making clear in very real terms that entrepreneurship attracting crime is not simply an abstract theoretical idea but a life-altering—and in some cases a life-ending—reality for those who experience it.”
