The New Industrial Organization and Small Business

27 Pages Posted: 31 Oct 2008

See all articles by John E. Kwoka Jr.

John E. Kwoka Jr.

affiliation not provided to SSRN

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics

Date Written: March 2000

Abstract

The small business sector is an important part of the American economic landscape, in both absolute and relative terms. Despite its absolute growth, however, the sector accounts for a diminishing share of private sector activity. But its importance, and changes in importance, vary across industrial sectors of the economy.Drawing on the theoretical and empirical insights developed in recent books by JohnSutton, we suggest that the presence or absence of endogenous strategic behaviors of the larger firms with respect to advertising, promotion, research and development, and other sunk cost expenditures may well play an important role in explaining the differing levels of small business importance, both cross-sectionally and over time. We conclude the paper with suggestions for research directions that could shed further light on these ideas.

Suggested Citation

Kwoka Jr., John E. and White, Lawrence J., The New Industrial Organization and Small Business (March 2000). NYU Working Paper No. EC-00-03. Available at SSRN: https://ssrn.com/abstract=1292682

John E. Kwoka Jr. (Contact Author)

affiliation not provided to SSRN

No Address Available

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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