Job Creation, Small vs. Large vs. Young, and the SBA
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Chapter in forthcoming NBER book Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, John Haltiwanger, Erik Hurst, Javier Miranda, and Antoinette Schoar, editors
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.”
This paper was revised on June 23, 2016Job Creation, Small vs. Large vs. Young, and the SBA, J. David Brown, John S. Earle, Yana Morgulis
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