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According to the general tendency, big corporations that are established in small towns, remove local businesses from the market. As such, big corporations should not be welcomed as they negatively affect local entrepreneurs and lead to the increase in the unemployment level of the local residents.
According to Garrett, in Portland, local businesses provide 76% bigger returns to the local economic sector rather than big chain stores. Moreover, the findings indicate that the effect of economic conditions is threefold: direct, indirect, and induced.
Direct effect denotes that local businesses obtain products and services from other companies and thus return the profit. Indirect effects imply that supplying companies also return profit to the owners in the local area as they purchase their own inputs and pay the personnel. Induced effects entail purchasing of products and services that are locally produced.
Furthermore, the local population of small towns suffers from unemployment, and people are thus forced to leave their hometown to find jobs in other places. When a big company is established in a small town, it destroys hundreds of workplaces that were occupied by the local residents. For example, Walmart is one of such corporations that led to the increased unemployment.
In conclusion, small towns and local enterprises frequently become victims of big corporations. Therefore, due to the increase in unemployment level and economic return decrease, big companies should not be allowed to function in small towns.