This question is best answered by Michael H. Shuman, author of the book Going Local. "Going local does not mean walling off the outside world. It means nurturing locally owned businesses which use local resources sustainably, employ local workers at decent wages and serve primarily local consumers. It means becoming more self sufficient and less dependent on imports. Control moves from the boardrooms of distant corporations and back into the community where it belongs.”(Shuman 2000)
Money Spent locally supports the community, as much of it gets reinvested in local enterprise. An article from Time magazine says 'money is like blood to a community, it needs to keep flowing to keep the economy healthy. Money going out is like a wound.'
When you purchase at locally owned businesses, more money re-circulates in the community. Local businesses often patronize other local businesses, service providers, ranches and farms. This article from Sustainable Connections lists the top 10 reasons to buy local.
On average, for every $100 spent at a locally owned business, up to $70 stays in the local economy, creating jobs, and expanding the community's tax base. The success of locally owned, independent businesses provides real-life examples to our young people, proving that they can stay in the community, and prosper on their own terms. Local businesses are owned by people who live in the community, and are more invested in the community's future. Studies have shown that local businesses donate to community causes at over twice the rate of chain stores.