Small business and job creation: Dissecting the myth and reassessing the facts

Davis, Steven J.; Haltiwanger, John; Schuh, Scott

doi:10.1007/bf00393278

Cited by 426 publications

(336 citation statements)

References 14 publications

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“…Davis et al (1996), for example, find that small firms constitute the vast majority of businesses, but they are only of limited importance with regard to overall employment. Contrary, a number of empirical contributions provide evidence that jobs are mainly created by small firms (see, e.g., Broersma and Gautier 1997, Davidsson et al 1998and Picot and Dupuy 1998.…”

Section: Introductionmentioning

confidence: 99%

Job creation and the intra-distribution dynamics of the firm size distribution

Huber¹,

Oberhofer²,

Pfaffermayr³

2013

Industrial and Corporate Change

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractBased on a structural model for initial firm size, survival and firm growth we estimate firm-specific transition probabilities between size classes of the firm size distribution. This allows an assessment of the impact of different (counterfactual) economic policy measures on intra-distribution dynamics of the firm size distribution. We find that policies increasing the life span of firms reduce the exit hazard of young firms, but also reduce the probability to be a Gazelle. An increase in the industry-wide entry rate increases the exit hazards of incumbent firms and has no strong impact on the likelihood of firms to become Gazelles. Increasing market growth, by contrast, decreases the exit hazards for incumbent firms and slightly increases the likelihood of firms to be Gazelles. Finally, an increase in the birth size of firms increases the probability of young firms to be Gazelles with strongest effects for the smallest firms.

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Section: Introductionmentioning

confidence: 99%

Job creation and the intra-distribution dynamics of the firm size distribution

Huber¹,

Oberhofer²,

Pfaffermayr³

2013

Industrial and Corporate Change

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“…Birch (1987) thus found that firms with less than 20 employees account for 88% of overall US employment growth. Davis et al (1996aDavis et al ( , 1996b later argued that Birch's findings had an upward bias in the contribution from small firms. Presenting a method without this problem, Davis et al (1996b) found that plants with an average size less than 100 employees accounted for about one third of gross job creation in US manufacturing over the period [1973][1974][1975][1976][1977][1978][1979][1980][1981][1982][1983][1984][1985][1986][1987][1988].…”

Section: Introductionmentioning

confidence: 99%

“…Davis et al (1996aDavis et al ( , 1996b later argued that Birch's findings had an upward bias in the contribution from small firms. Presenting a method without this problem, Davis et al (1996b) found that plants with an average size less than 100 employees accounted for about one third of gross job creation in US manufacturing over the period [1973][1974][1975][1976][1977][1978][1979][1980][1981][1982][1983][1984][1985][1986][1987][1988]. Using the method developed by Davis et al, Neumark et al (2008) studied the overall economy and found that plants with an average size of less than 100 employees accounted for 70% of gross job creation in the period 1992-2002, while plants with less than 20 employees in themselves accounted for almost 50%.…”

Section: Introductionmentioning

confidence: 99%

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Entrepreneurship, job creation and wage growth

2009

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This paper analyses the importance of entrepreneurs for job creation and wage growth. Relying on unique data that covers all plants, firms and individuals in the Danish private sector, we are able to distil a number of different measures of entrepreneurial plants from the set of new plants, including measures that much more precisely capture the "truly new" or "entrepreneurial" plants than in previous studies. Using these data, we find that while new plants in general account for one third of the gross job creation in the economy, entrepreneurial plants are responsible for between 15% and 25% of this, and thus only account for up to 8% of total gross job creation in the economy. However, entrepreneurial plants seem to generate more additional jobs than other new plants in the years following entry. Finally, the jobs generated by entrepreneurial plants are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages. However, this insight varies across the different types of entrepreneurial plants.

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“…• and constitutes the main drive behind the creation of jobs (Caree and Klomp, 1996;Davis et al, 1996). They are one of the main vehicles for the creation and dissemination • of innovation, especially when entrepreneurs show a strong propensity for entrepreneurship and are able to transfer their entrepreneurial culture into their businesses, specifically in those sectors characterised by knowledge-intensive and high-added-value productions such as computing or biotechnology 6 (Edwards et al, 2005;Massa, 2008;Vrande et al, 2008;Love and Roper, 2013).…”

Section: The Importance Of the Smes In The European Economymentioning

confidence: 99%

Microfinance, EU Structural Funds and Capacity Building for Managing Authorities

2016

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Book -Published VersionMicrofinance, EU structural funds and capacity building for managing authorities: A comparative analysis of European convergence regions The Palgrave Studies in Impact Finance series provides a valuable scientific 'hub' for researchers, professionals and policy makers involved in impact finance and related topics. It includes studies in the social, political, environmental and ethical impact of finance, exploring all aspects of impact finance and socially responsible investment, including policy issues, financial instruments, markets and clients, standards, regulations and financial management, with a particular focus on impact investments and microfinance.Titles feature the most recent empirical analysis with a theoretical approach, including up to date and innovative studies that cover issues which impact finance and society globally.

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Small business and job creation: Dissecting the myth and reassessing the facts

Cited by 426 publications

References 14 publications

Job creation and the intra-distribution dynamics of the firm size distribution

Job creation and the intra-distribution dynamics of the firm size distribution

Entrepreneurship, job creation and wage growth

Microfinance, EU Structural Funds and Capacity Building for Managing Authorities

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