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Too Big? Too Small? Just Right? An Empirical Perspective on Local Firm Size Distribution and Economic Growth in U.S. Counties and High-Poverty Rural Regions

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  • Timothy M. Komarek
  • Scott Loveridge

Abstract

The authors examine the relationship between the distribution of firms across size categories and economic growth, extending Loveridge and Nizalov’s Michigan results to the United States. Using county-level data, including growth and control variables, the authors explore the relationship between the size distribution of firms and 12-year growth patterns for the continental United States and three multistate high-poverty regions. The results of fixed-effect feasible generalized least squares estimation show a connection between employment growth and the distribution of firms across size categories for the continental United States. The results also show a positive link between employment growth and firm size for Lineal America and the Plantation Belt, but no statistically significant relationship for the Borderlands. The results suggest that policies aimed at promoting small business, while important nationally, may differ in impacts across regions and provide an argument for region-level decision making about growth policies.

Suggested Citation

  • Timothy M. Komarek & Scott Loveridge, 2014. "Too Big? Too Small? Just Right? An Empirical Perspective on Local Firm Size Distribution and Economic Growth in U.S. Counties and High-Poverty Rural Regions," Economic Development Quarterly, , vol. 28(1), pages 28-41, February.
    • Handle: RePEc:sae:ecdequ:v:28:y:2014:i:1:p:28-41
    DOI: 10.1177/0891242413506735
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    Cited by:

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    4. Alexandra Tsvetkova & Mark Partridge & Michael Betz, 2019. "Self-employment effects on regional growth: a bigger bang for a buck?," Small Business Economics, Springer, vol. 52(1), pages 27-45, January.
    5. Sarah A. Low & Jason P. Brown, 2017. "Manufacturing Plant Survival in a Period of Decline," Growth and Change, Wiley Blackwell, vol. 48(3), pages 297-312, September.
    6. Mark Partridge & Sydney Schreiner & Alexandra Tsvetkova & Carlianne Elizabeth Patrick, 2020. "The Effects of State and Local Economic Incentives on Business Start-Ups in the United States: County-Level Evidence," Economic Development Quarterly, , vol. 34(2), pages 171-187, May.
    7. Francisco J. Pallares & Richard V. Adkisson, 2017. "The Impact of Industrial Diversification on Employment Growth in the 50 U.S. States: 2000-2013," Economic Development Quarterly, , vol. 31(4), pages 275-284, November.
    8. Andersson, Martin & Lavesson, Niclas & Partridge, Mark D., 2019. "Local Rates of New Firm Formation: An Empirical Exploration using Swedish Data," Working Paper Series 1290, Research Institute of Industrial Economics.

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