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An Analysis of Small Business Size and Rate of Discontinuance

Author

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  • Alfred R Nucci
  • Timothy Bates

Abstract

This study investigates small business failure rates in relation to several measures of firm size. Utilizing the new Characteristics of Business Owners ( CBO ) data base, a nationwide sample of firms is utilized that is representative of the small business universe. One subset--small business employers--is shown to have relatively low rates of failure, while another group--very small firms with no employees--exhibits relatively high rates of business discontinuance. The finding that the probability of firm failure is strongly (inversely) related to firm size is shown to hold up as well when the age of the business is controlled for.

Suggested Citation

  • Alfred R Nucci & Timothy Bates, 1990. "An Analysis of Small Business Size and Rate of Discontinuance," Working Papers 90-2, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:90-2
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    File URL: https://www2.census.gov/ces/wp/1990/CES-WP-90-02.pdf
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    Cited by:

    1. Bates, Timothy, 1998. "Survival patterns among newcomers to franchising," Journal of Business Venturing, Elsevier, vol. 13(2), pages 113-130, March.
    2. Jensen, J Bradford & McGuckin, Robert H, 1997. "Firm Performance and Evolution: Empirical Regularities in the US Microdata," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 25-47.
    3. Frazer, Lorelle, 2001. "Causes of disruption to franchise operations," Journal of Business Research, Elsevier, vol. 54(3), pages 227-234, December.
    4. Brian Headd, 2001. "Business Success: Factors Leading to Surviving and Closing Successfully," Working Papers 01-01, Center for Economic Studies, U.S. Census Bureau.
    5. Nguyen, Sang V & Streitwieser, Mary L, 1999. "Factor Substitution in U.S. Manufacturing: Does Plant Size Matter?," Small Business Economics, Springer, vol. 12(1), pages 41-57, February.
    6. Susan Coleman, 2002. "Small Firm Use of Debt: An Examination of the Smallest Small Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 7(1), pages 51-76, Spring.
    7. Susan Coleman & Richard Cohn, 2001. "The 'Lack of Separation' Revisited: Small Business Owners and Risk," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 6(1), pages 104-114, Spring.
    8. Timothy Bates & Caren Grown, 1991. "Commercial Bank Lending Practices And The Development Of Black-Owned Construction Companies," Working Papers 91-9, Center for Economic Studies, U.S. Census Bureau.
    9. Catherine Armington & Zoltan Acs, 2000. "Differences in Job Growth and Persistence in Services and Manufacturing," Working Papers 00-04, Center for Economic Studies, U.S. Census Bureau.
    10. Catherine Armington & Zoltan Acs, 2004. "Job creation and persistence in services and manufacturing," Journal of Evolutionary Economics, Springer, vol. 14(3), pages 309-325, July.
    11. John Watson & Jim Everett, 1996. "Small Business Failure Rates: Choice of Definition and the Size Effect," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 5(3), pages 271-285, Fall.
    12. Alfred R Nucci, 1992. "The Characteristics of Business Owners Database," Working Papers 92-7, Center for Economic Studies, U.S. Census Bureau.
    13. Adela Luque & Javier Miranda, 2000. "Technology Use and Worker Outcomes: Direct Evidence from Linked Employee-Employer Data," Working Papers 00-13, Center for Economic Studies, U.S. Census Bureau.
    14. Kuo-Feng Huang & Chwo-Ming Yu & Dah-Hsian Seetoo, 2012. "Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?," The Journal of Technology Transfer, Springer, vol. 37(5), pages 715-731, October.
    15. Amit, Raphael & Thornhill, Stewart, 2003. "Comprendre l'echec : mortalite organisationnelle et approche fondee sur les ressources," Direction des etudes analytiques : documents de recherche 2003202f, Statistics Canada, Direction des etudes analytiques.
    16. Brian Headd, 1999. "The Characteristics of Business Owners Database, 1992," Working Papers 99-8, Center for Economic Studies, U.S. Census Bureau.
    17. Amit, Raphael & Thornhill, Stewart, 2003. "Learning from Failure: Organizational Mortality and the Resource-based View," Analytical Studies Branch Research Paper Series 2003202e, Statistics Canada, Analytical Studies Branch.
    18. Gary Castrogiovanni & Robert Justis, 2007. "Franchise failure: a reassessment of the Bates (1995) results," Service Business, Springer;Pan-Pacific Business Association, vol. 1(3), pages 247-256, September.
    19. Lafontaine, Francine & Shaw, Kathryn L., 1998. "Franchising growth and franchisor entry and exit in the U.S. market: Myth and reality," Journal of Business Venturing, Elsevier, vol. 13(2), pages 95-112, March.
    20. Dennis Glennon & Peter Nigro, 2005. "An Analysis of SBA Loan Defaults by Maturity Structure," Journal of Financial Services Research, Springer;Western Finance Association, vol. 28(1), pages 77-111, October.
    21. Kuo-Feng Huang & Chwo-Ming Yu, 2011. "The effect of competitive and non-competitive R&D collaboration on firm innovation," The Journal of Technology Transfer, Springer, vol. 36(4), pages 383-403, August.
    22. Alfred R Nucci, 1989. "The Characteristics of Business Owners (CBO) Database," Working Papers 89-9, Center for Economic Studies, U.S. Census Bureau.

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    Keywords

    CES; economic; research; micro; data; microdata; chief; economist;

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