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Establishment Size and Local Employment Growth


  • Sherrill Shaffer



In a sample of more than 2000 U.S. counties, smaller average establishment size is generally associated with faster subsequent growth rates of sectoral employment, both within and across sectors. The estimated effects are large in magnitude and thus economically important, and are consistent with several theories previously developed. These findings contribute toward a more precise understanding of the role of small businesses in economic growth and labor markets. Copyright Springer 2006

Suggested Citation

  • Sherrill Shaffer, 2006. "Establishment Size and Local Employment Growth," Small Business Economics, Springer, vol. 26(5), pages 439-454, June.
  • Handle: RePEc:kap:sbusec:v:26:y:2006:i:5:p:439-454
    DOI: 10.1007/s11187-005-5598-0

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    References listed on IDEAS

    1. Andy Cosh & Alan Hughes & Melvyn Weeks, 2000. "The Relationship Between Training and Employment Growth in Small and Medium-Sized Enterprises," Working Papers wp188, Centre for Business Research, University of Cambridge.
    2. Jan Eeckhout & Boyan Jovanovic, 1998. "Inequality," NBER Working Papers 6841, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Deller, Steven C., 2007. "The Role of Microenterprises in Economic Growth: A Panel Study of Wisconsin Counties 1977 to 1997," Staff Paper Series 514, University of Wisconsin, Agricultural and Applied Economics.
    2. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
    3. 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.
    4. Sherrill Shaffer, 2008. "Financial Performance Of Small Business Loans: Indirect Evidence," CAMA Working Papers 2008-28, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Sherrill Shaffer & Iftekhar Hasan & Mingming Zhou, 2015. "New Small Firms and Dimensions of Economic Performance," Economic Development Quarterly, , vol. 29(1), pages 65-78, February.
    6. Joshua Drucker, 2009. "Trends in Regional Industrial Concentration in the United States," Working Papers 09-06, Center for Economic Studies, U.S. Census Bureau.

    More about this item


    establishment size; employment growth; J23; L11; O47;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence


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