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

Listed author(s):
  • 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.

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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 95-2.

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Date of creation: Feb 1995
Handle: RePEc:cen:wpaper:95-2
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