IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/35703.html

How Big is Small? The Economic Effects of Access to Small Business Government Support

Author

Listed:
  • J. David Brown
  • Matthew Denes
  • Ran Duchin
  • John Hackney

Abstract

We study the effects of vast increases in U.S. small business program eligibility standards, which expanded larger firms' access to support for small businesses. Exploiting quasi-random variation in the timing of these expansions and using administrative Census data, we show that revenues decline for the smallest firms, particularly those that are younger, more productive, and financially constrained. Government procurement contracts also are reallocated to larger firms. Consequently, firm exits increase, wages decline, and patenting falls. These findings highlight the economic consequences of expanding eligibility: by crowding out the smallest firms, resources shift away from high-potential firms, reducing dynamism and innovation.

Suggested Citation

  • J. David Brown & Matthew Denes & Ran Duchin & John Hackney, 2026. "How Big is Small? The Economic Effects of Access to Small Business Government Support," NBER Working Papers 35703, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35703
    Note: CF PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w35703.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:35703. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.