The Performance of Large and Small Businesses

25 Pages Posted: 1 Dec 2020

See all articles by Raj Gupta

Raj Gupta

American College of Healthcare Trustees; American College of Healthcare Trustees

Date Written: November 28, 2020

Abstract

The Coronavirus Pandemic has had enormous impact on both large and small businesses in the United States and Worldwide. As COVID-19 spread throughout the United States and worldwide in March of 2020, many countries imposed lockdowns. The lockdowns have had significant impact on many Large and Small Businesses. In this article we will examine the performance of large versus small businesses. We will use annual returns for small and large businesses as a proxy for performance. To obtain annual returns, we will calculate the annual changes in Net Worth. To test whether there are significant differences between the means of Large and Small Business Returns we will conduct single-factor Analysis of Variance (ANOVA) Tests. We will examine Correlations and conduct single and multi-factor regressions. The results show that means of returns of Large Businesses are not statistically different from the means of returns to Small Businesses. We also find that Large Businesses returns are strongly correlated with Small Business Returns. Regression results show that S&P 500 returns, T-Bill returns and 10-year T-Bond returns are not effective at explaining Large or Small Business Returns. However, Large Business Assets and Large Business Liabilities as independent variables significantly explain Large Business Returns. The finding that Large Business Returns are not statistically different from small business returns might seem surprising to some. Future research should examine the determinants of Large and Small Business Assets.

Keywords: Large Businesses, Small Businesses, Performance, Returns, Regression

JEL Classification: G, M, C

Suggested Citation

Gupta, Raj, The Performance of Large and Small Businesses (November 28, 2020). Available at SSRN: https://ssrn.com/abstract=3739067 or http://dx.doi.org/10.2139/ssrn.3739067

Raj Gupta (Contact Author)

American College of Healthcare Trustees ( email )

PO Box 1714
Houlton, ME 04730
United States
04730 (Fax)

HOME PAGE: http://www.facht.org

American College of Healthcare Trustees ( email )

PO Box 1714
Houlton, ME 04730
United States
04730 (Fax)

HOME PAGE: http://www.facht.org

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