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Microenterprises and economic growth: a panel study of the US states 1977-1997

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  • Steven Deller
  • James McConnon

Abstract

In this study, we examine the role of microenterprises in US economic growth. Using a panel of the 48 lower US states from 1977 to 1997, we estimate an expanded Carlino-Mills type model of growth. Microenterprises are defined as having between one and four employees. Results suggest that a higher share of goods producing firms that are microenterprises tend to be associated with lower levels of population, employment and income growth, while a higher share of service producing firms classified as micro are associated with higher levels of growth. These results suggest that care must be taken when promoting microenterprises as a major engine of economic growth.

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  • Steven Deller & James McConnon, 2009. "Microenterprises and economic growth: a panel study of the US states 1977-1997," Applied Economics Letters, Taylor & Francis Journals, vol. 16(13), pages 1307-1312.
    • Handle: RePEc:taf:apeclt:v:16:y:2009:i:13:p:1307-1312
    DOI: 10.1080/13504850701367361
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    1. Thorsten Beck, 2003. "Small and medium enterprises, growth, and poverty : cross-country evidence," Policy Research Working Paper Series 3178, The World Bank.
    2. Acs,Zoltan J. & Audretsch,David B. (ed.), 1993. "Small Firms and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521431156.
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    Cited by:

    1. Timothy Komarek & Scott Loveridge, 2015. "Firm Sizes And Economic Development: Estimating Long-Term Effects On U.S. County Growth, 1990–2000," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 262-279, March.
    2. Sarah A. Low & Andrew M. Isserman, 2015. "Where Are the Innovative Entrepreneurs? Identifying Innovative Industries and Measuring Innovative Entrepreneurship," International Regional Science Review, , vol. 38(2), pages 171-201, April.
    3. Freedman, Emily A. & McConnon Jr., James C. & Hunt, Gary L. & Gabe, Todd M., 2016. "An Analysis of the Economic Impacts of Big-Box Stores on a Community’s Retail Sector: Evidence from Maine," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    4. Dr. J. G. Sri Ranjith & Dr. O. G Dayaratna Banda, 2014. "Determinants of Success of Small Business: A Survey-Based Study in Kuliyapitiya Divisional Secretariat of Sri Lanka," International Journal of Business and Social Research, LAR Center Press, vol. 4(6), pages 38-50, June.
    5. 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.
    6. Viggo Jean-Hansen, 2011. "Is economic growth in cities crowding out freight handling and transport?," ERSA conference papers ersa10p1615, European Regional Science Association.
    7. Goetz, Stephan J. & Partridge, Mark D. & Deller, Steven C. & Fleming, David A., 2010. "Evaluating U.S. Rural Entrepreneurship Policy," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(1), pages 1-14.
    8. Heather M. Stephens & Mark D. Partridge, 2011. "Do Entrepreneurs Enhance Economic Growth in Lagging Regions?," Growth and Change, Wiley Blackwell, vol. 42(4), pages 431-465, December.
    9. M. Rose Olfert & Mark D. Partridge, 2010. "Best Practices in Twenty‐First‐Century Rural Development and Policy," Growth and Change, Wiley Blackwell, vol. 41(2), pages 147-164, June.
    10. 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.
    11. Goetz, Stephan J. & Fleming, David A. & Rupasingha, Anil, 2012. "The Economic Impacts of Self-Employment," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(3), pages 1-7, August.
    12. Deller, Steven C., 2007. "The Role of Microenterprises in Economic Growth: A Panel Study of Wisconsin Counties 1977 to 1997," Staff Papers 92140, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    13. Sergio A. Contreras & Andrew J. Greenlee, 2021. "Evaluating the effectiveness of ChileCompra's Entrepreneurship Centers policy," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(4), pages 1262-1282, August.
    14. Dr. J. G. Sri Ranjith & Dr. O. G Dayaratna Banda, 2014. "Determinants of Success of Small Business: A Survey-Based Study in Kuliyapitiya Divisional Secretariat of Sri Lanka," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(6), pages 38-50, June.
    15. repec:rre:publsh:v:40:y:2010:i:1:p:71-97 is not listed on IDEAS
    16. Abdullah Al Mamun & Mohd Asrul Hery Bin Ibrahim & Rajennd A/L Muniady & Mohammad Bin Ismail & Noorshella Binti Che Nawi & Noorul Azwin Binti Md Nasir, 2019. "Observations of Participation in Development Initiatives on Enterprise Income and Asset in Peninsular Malaysia," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 5(2), pages 198-213, July.
    17. Zachary T. Keeler & Heather M. Stephens, 2023. "What matters for lagging regions? The role of self‐employment and industrial diversity in distressed areas," Growth and Change, Wiley Blackwell, vol. 54(4), pages 962-1001, December.
    18. Sergio A. Contreras, 2022. "One size does not fit all: evaluating the impact of microenterprise measurement on policy evaluation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 587-613, June.
    19. Anil Rupasingha & Stephan J. Goetz, 2013. "Self-employment and local economic performance: Evidence from US counties," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 141-161, March.

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