Small Business Redefined: A Quasi-Linear Fuzzy Classification of Firm Size
37 Pages Posted: 17 Apr 2012
Date Written: April 4, 2012
The quasi-linear fuzzy modeling of Filev (1991) is used to estimate the relationship between the number of managers and employees in a firm. The results form the basis for the classification of firms into small and large businesses. Application to a data of Australian firms shows an evolution episode during which firms are driven by various transitional forces. The composition of the transition region suggests that the 2011 small business tax-break cap set by Australian Taxation Office falls short of fully supporting growth as intended. The implications pave the way for improvement to the business tax code aiming at growth and job creation.
Keywords: fuzzy logic, small business, job creation, business taxation
JEL Classification: C38, C61, D23, H25
Suggested Citation: Suggested Citation