than ever, state policymakers should be aware of how their
decisions affect small business. Creating an environment that
values entrepreneurship and risk-taking is sure to increase
economic growth, personal income, and employment.
Dr. Chad Moutray, Chief Economist, Small Business
Administration Office of Advocacy
“This study confirms the importance of small startups for the
economic well-being of every state,” said Office of Advocacy
Chief Economist, Dr. Chad Moutray. “Now more than ever, state
policymakers should be aware of how their decisions affect small
business. Creating an environment that values entrepreneurship
and risk-taking is sure to increase economic growth, personal
income, and employment.”
Small Business and State Growth: An Econometric Investigation,
written by Donald Bruce, John Deskins, Brian Hill, and Jonathan
Rork with funding from the Office of Advocacy, uses newly
available U.S. Census Bureau data to analyze the impact of small
firm establishment births and closures on state economies. The
data became available through a program partially funded by the
Office of Advocacy.
The study used data covering the years 1988 to 2002 and examined
a wide variety of factors influencing state economic growth.
After controlling for many determinants of growth, the authors
conclude that in order to increase gross state product, state
personal income, and total state employment, “the most fruitful
policy option available to state governments is to establish and
maintain a fertile environment for new establishment
Dr. Moutray presented the study at the National Association of
Regional Councils’ National Conference of Regions 2007, where he
served as a panelist.
Download the entire 40 page report here.