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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 fast-growing firms (“gazelles”) 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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Start-ups, job creation, and founder characteristics
Abstract Analyzing data on all US employers in a cohort of entering firms, we document a highly skewed size distribution, such that the largest 5% account for over half of cohort employment at firm birth and more than two-thirds at firm age 7. Analyzing linked survey-administrative data, we find that female, African–American, and younger founders are initially less likely to start large firms. The gender gap persists through firm age 7, while racial and age gaps do not. Education is positively associated with start-up size, except for graduate degrees. Prior entrepreneurship and founding team size are positively associated, but team diversity is not. Specifications with capital and industry controls illuminate roles of financial constraints and sectoral choice.
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- PAR ID:
- 10116777
- Publisher / Repository:
- Oxford University Press
- Date Published:
- Journal Name:
- Industrial and Corporate Change
- Volume:
- 28
- Issue:
- 6
- ISSN:
- 0960-6491
- Page Range / eLocation ID:
- p. 1637-1672
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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