Small Business Growth: Searching for Stylized Facts

October 31, 2007

While firm size data exists, little firm age data exists. This has hampered efforts to understand the life-cycle of firms overall and by industry. There is a need to document the dynamics of new firms and the effect of the business cycle on the growth, decline and survival of firms.

Growing firms are generally a constant share of the economy with a minor business cycle effect; firms with employment growth outnumber firms with employment decline, and fast growing firms in a given year tend to revert to the mean in later years.

by Brian Headd, U.S. Small Business Administration, Office of Advocacy and Bruce Kirchhoff, New Jersey Institute of Technology

Full Report: http://www.sba.gov/advo/research/rs311tot.pdf