Firm Sizes and Economic Development: Estimating Long‐Term Effects on U.S. County Growth, 1990–2000

18 Pages Posted: 4 Mar 2015

See all articles by Tim Komarek

Tim Komarek

Valdosta State University

Scott Loveridge

Michigan State University - Department of Agricultural Economics

Date Written: March 2015

Abstract

This paper investigates the role of the business size distribution on income and employment growth in U.S. counties from 1990 to 2000. We measure the business size distribution as the share of employees across nine establishment size categories that range from microfirms (one to four employees) to large firms (1,000+ employees) and using three indices similar to a Gini coefficient. Results show that the business size distribution has a significant impact on county‐level growth patterns. Employment shares in small firms increase employment growth, but decrease income growth. One possible conclusion suggests policies emphasizing small firms and entrepreneurship during times of high unemployment.

Suggested Citation

Komarek, Timothy and Loveridge, Scott, Firm Sizes and Economic Development: Estimating Long‐Term Effects on U.S. County Growth, 1990–2000 (March 2015). Journal of Regional Science, Vol. 55, Issue 2, pp. 262-279, 2015. Available at SSRN: https://ssrn.com/abstract=2573380 or http://dx.doi.org/10.1111/jors.12159

Timothy Komarek (Contact Author)

Valdosta State University ( email )

1500 N Patterson Street
Valdosta, GA 31698
United States

Scott Loveridge

Michigan State University - Department of Agricultural Economics ( email )

11 Agriculture Hall
East Lansing, MI 48824
United States
517-432-9969 (Phone)
517-432-1048 (Fax)

HOME PAGE: http://www.aec.msu.edu/agecon/faculty/loveridge.htm

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