Do Business Definition Decisions Distort Small Business Research Results?
34 Pages Posted: 19 Aug 2008
Date Written: August 14, 2008
The choice of business definition at the outset of research can drive results. Pooling different kinds of businesses allows nonemployer businesses (which are numerous and small) to overwhelm employer businesses (whose numbers are far fewer, but whose business activity is many times more significant). A scan of special tabulations from the U.S. Census Bureau's 2002 Survey of Business Owners shows that nonemployer and employer businesses differ qualitatively, as do employer firms and businesses of differing sizes.
We investigate how nonemployers and employers differ in number, receipts, industry, business turnover, survival, and ownership characteristics. Cross-tabulations are presented for such business characteristics as number of employees, receipt size, business age, veteran ownership, home-based, franchise status, family-owned status, legal form of organization, geography, industry, and financing.
Keywords: nonemployer firm, employer firm, business data, home-based, owner age, veteran, franchise, small business demographics
JEL Classification: M13, L10
Suggested Citation: Suggested Citation