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Small Businesses Do Appear To Benefit From State/Local Government Economic Development Assistance


  • Timothy Bates


This study analyzes traits of small businesses that received state/local government aid in such forms as managerial, technical assistance, help in obtaining loans or bonding, and procurement assistance. Over 13 percent of small firms nationwide were found to be involved in selling goods/services to state/local government. Among firms owned by nonminorities, aid recipients tend to be the larger small businesses, but this pattern did not typify minority-owned firms. Among the nonminority businesses, furthermore, those aided by state/local government are more likely than nonassisted firms to remain in operation, even when various form and owner characteristics are controlled for statistically; this pattern did not typify minority-owned firms. State/local government aid flows disproportionately to women- owned businesses and to firm owners who lack managerial experience. No evidence was found indicating targeting of assistance to specific industry groups.

Suggested Citation

  • Timothy Bates, 1995. "Small Businesses Do Appear To Benefit From State/Local Government Economic Development Assistance," Working Papers 95-2, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:95-2

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    References listed on IDEAS

    1. Bolton, Patrick & Scharfstein, David S, 1990. "A Theory of Predation Based on Agency Problems in Financial Contracting," American Economic Review, American Economic Association, vol. 80(1), pages 93-106, March.
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    Cited by:

    1. Cadogan, Godfrey, 1994. "Do Public Sector Contracts And Policy Towards Small Firms Matter?: Evidence From Women Business Enterprises," MPRA Paper 26595, University Library of Munich, Germany, revised 14 Sep 2010.
    2. Ollinger, Michael & Fernandez-Cornejo, Jorge, 1998. "Innovation And Regulation In The Pesticide Industry," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April.
    3. Brian Headd, 1999. "The Characteristics of Business Owners Database, 1992," Working Papers 99-8, Center for Economic Studies, U.S. Census Bureau.
    4. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers 95-5, Center for Economic Studies, U.S. Census Bureau.
    5. Greene, Francis, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.

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


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