I like Dan Gross’s suggestion that there is a link between the number of Starbucks outlets in a country and its risk of being enveloped in a financial crisis. The numbers do not stack up precisely but there is something there.
Here is the theory as Dan explains it:
At first blush, there’s a pretty close correlation between a country having a significant Starbucks presence, especially in its financial capital, and major financial cock-ups, from Australia (big blow ups in finance, hedge funds and asset-management companies; to the United Kingdom (nationalisation of the nation’s largest banks). In many ways, London in recent years has been a more concentrated version of New York—the wellspring of many toxic innovations, a hedge-fund haven. It sports 256 Starbucks. In Spain, which is now grappling with the bursting of a speculative coastal real-estate bubble (sound familiar?), the financial capital, Madrid, has 48 outlets. In crazy Dubai, 48 outlets serve a population of 1.4 million. And so on: South Korea, which is bailing outs its banks big time, has 253. Paris, the locus of several embarrassing debacles, has 35.
On the other hand, none of it proves Dan’s theory. You would expect Starbucks to have expanded in countries with big economies or rapid economic growth, a category that includes all of the above.
If I were an academic looking at the Starbucks international store locator, I would focus on two variables: the size of the cities where Starbucks has its stores and the rate of growth of the local economy.
The point about financial centres such as London, Dubai and Hong Kong is that, during the credit bubble, they grew into city states that dominated their national economies. That provided very fertile ground for Starbucks: lots of people with cash to spare in a small area. They also grew rapidly, with property and retail booms to match.
If you regressed those two factors against Starbucks stores, I imagine there would be a link.
