How local policy can help small business in times of recession

Christiana McFarland and J. Katie McConnell, "Small Business Growth During a Recession: 
Local Policy Implications," Economic Development Quarterly 27 (2012): 2

The take-away: This study considers how local policies can promote or hinder the growth of small businesses, particularly in times of economic recession. It examines the effects of various policies on different kinds of small businesses at different stages in their development—self-employed, 1 to 9 employees, and 10 to 99 employees—concluding that the best policies for small business growth are those that promote collaboration between the public and private sectors and provide regulatory assistance. 

Abstract

This research examines the relationship between local government policies and small business growth at various stages of development. Businesses at different stages of development have distinct needs; therefore, we predict that they will interact with the local policy environment in different ways. We use data from the 2009 International City/County Management Association and National League of Cities economic development survey, the National Establishment Time Series Database, and the American Community Survey to construct four regression models to predict growth between 2007 and 2008 of small businesses overall, small businesses in the self- employed stage, small businesses with 1 to 9 employees, and small businesses with 10 to 99 employees. Overall, our findings suggest that the local policies that most significantly affect small business growth are those that create a supportive culture between the local public and private sectors and provide regulatory assistance. 

Full article (requires access)