Does Size Matter? Evidence from Changes in Small Business Size Standards

50 Pages Posted: 10 Sep 2019 Last revised: 20 Nov 2019

See all articles by Matthew Denes

Matthew Denes

Carnegie Mellon University - Tepper School of Business

Ran Duchin

Boston College - Carroll School of Management

John Hackney

University of South Carolina - Department of Finance

Date Written: November 18, 2019

Abstract

Small business size standards increased considerably in the United States since 2002. Following their staggered introduction across industries, we find lower shares of small businesses in industry establishments and employment and declines in job creation and business formation. Consequently, growth rates of industry productivity declined, leading to an overall drop in GDP growth in areas reliant on small businesses. The effects operate through shifts in access to government procurement and small business loans and are nonexistent following proposed unimplemented changes. Overall, we offer new evidence on the role of government policy and small firms in business dynamism and economic growth.

Keywords: small business, output, productivity, employment, gross domestic product

JEL Classification: G32, G38, L11

Suggested Citation

Denes, Matthew and Duchin, Ran and Hackney, John, Does Size Matter? Evidence from Changes in Small Business Size Standards (November 18, 2019). Available at SSRN: https://ssrn.com/abstract=3451424 or http://dx.doi.org/10.2139/ssrn.3451424

Matthew Denes (Contact Author)

Carnegie Mellon University - Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://sites.google.com/site/matthewdenes

Ran Duchin

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

John Hackney

University of South Carolina - Department of Finance ( email )

1014 Greene Street
Columbia, SC 29208
United States

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