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Job Creation, Small vs. Large vs. Young, and the SBA

Author

Listed:
  • Brown, J. David

    (U.S. Census Bureau)

  • Earle, John S.

    (George Mason University)

  • Morgulis, Yana

    (University of California, San Diego)

Abstract

Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The number of jobs created per million dollars of loans generally increases with size and decreases in age. The results imply that fast-growing firms ("gazelles") experience the greatest financial constraints to growth, while the growth of small, mature firms is least financially constrained. The estimated association between survival and loan amount is larger for younger and smaller firms facing the "valley of death".

Suggested Citation

  • Brown, J. David & Earle, John S. & Morgulis, Yana, 2015. "Job Creation, Small vs. Large vs. Young, and the SBA," IZA Discussion Papers 9489, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9489
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    References listed on IDEAS

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    1. Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
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    7. Levenson, Alec R & Willard, Kristen L, 2000. "Do Firms Get the Financing They Want? Measuring Credit Rationing Experienced by Small Business in the U.S," Small Business Economics, Springer, vol. 14(2), pages 83-94, March.
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    Cited by:

    1. Rupasingha, Anil & Pender, John & Wiggins, Seth, 2018. "USDA’s Value-Added Producer Grant Program and Its Effect on Business Survival and Growth," Economic Research Report 276236, United States Department of Agriculture, Economic Research Service.
    2. Geurts, Karen & Van Biesebroeck, Johannes, 2016. "Firm creation and post-entry dynamics of de novo entrants," International Journal of Industrial Organization, Elsevier, vol. 49(C), pages 59-104.
    3. Wei Dong & Geoffrey Dunbar & Christian Friedrich & Dmitry Matveev & Romanos Priftis & Lin Shao, 2021. "Complementarities Between Fiscal Policy and Monetary Policy—Literature Review," Discussion Papers 2021-4, Bank of Canada.
    4. Matthew J. Higgins & Donald J. Lacombe & Briana S. Stenard & Andrew T. Young, 2021. "Evaluating the effects of Small Business Administration lending on growth," Small Business Economics, Springer, vol. 57(1), pages 23-45, June.
    5. Alessandro Barbera & Áron Gereben & Marcin Wolski, 2022. "Estimating conditional treatment effects of EIB lending to SMEs in Europe," BIS Working Papers 1006, Bank for International Settlements.
    6. Ring, Marius, 2019. "Entrepreneurial Wealth and Employment: Tracing Out the Effects of a Stock Market Crash," MPRA Paper 107020, University Library of Munich, Germany, revised 06 Apr 2021.

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    More about this item

    Keywords

    small businesses; credit constraints; firm survival; job creation; government loan guarantees;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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