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


  • Steven Deller
  • James McConnon


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.

Suggested Citation

  • 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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    References listed on IDEAS

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    Cited by:

    1. 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(03), August.
    2. 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.
    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. 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.
    5. Deller, Steven C., 2010. "Spatial Variations in the Role of Microenterprises in Economic Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 40(1), pages 71-97.
    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).
    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.
    10. 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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