Job Creation, Small vs. Large vs. Young, and the SBA

J. David Brown, John S. Earle, Yana Morgulis

This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, John Haltiwanger, Erik Hurst, Javier Miranda, and Antoinette Schoar, editors
Conference held December 16-17, 2014
Forthcoming from University of Chicago Press
in NBER Book Series Studies in Income and Wealth

Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The number of jobs created per million dollars of loans generally increases with size and decreases in age. The results imply that firms that have grown most since birth (hiring first employee) are those that experience the greatest financial constraints to growth, while the growth of small, mature firms is least financially constrained. The estimated association between survival and loan amount is larger for younger and smaller firms facing the “valley of death.”

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This paper was revised on June 23, 2016

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This chapter first appeared as NBER working paper w21733, Job Creation, Small vs. Large vs. Young, and the SBA, J. David Brown, John S. Earle, Yana Morgulis
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