Abstract
This chapter investigates the effects of business size, with an emphasis on operations with fewer than ten employees, on the economic development of states and US metropolitan areas. Gabe shows that the share of small businesses (as a percentage of all establishments) in a region supports the growth of good jobs, but the positive impacts attributed to these establishments mostly “go away” when the analysis accounts for the types of industries present in the state or metropolitan area. The share of large companies in a region, as of 1990, is associated with lower levels of economic development from that time to the near present. The transition of small businesses into larger firms, however, helps the growth of good jobs in a region.
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Notes
- 1.
This figure is calculated using data from County Business Patterns of the U.S. Census Bureau.
- 2.
http://link.springer.com/journal/11187. Accessed 21 September 2016.
- 3.
These figures are based on average plant size; see Table 1 from Davis et al. (1996b).
- 4.
Nonemployer statistics are from the U.S. Census Bureau.
- 5.
These states are Alaska, Colorado, Idaho, Maine, Montana, New York, North Dakota, South Dakota, Vermont, and Wyoming.
- 6.
This recommendation is in-line with the suggestion of Zoltan Acs and colleagues (2008) who, in the context of high-impact firms, recommend that local officials cultivate these types of businesses instead of trying to increase “entrepreneurship overall.”
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Gabe, T.M. (2017). Small Businesses and the Growth of Good US Jobs. In: The Pursuit of Economic Development. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-52476-4_5
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