NEWSRELEASE
For Release: February 5, 2007 Small Firm Establishment Births Propel State Economies Newly Available Data Confirm Importance Of Small Startups WASHINGTON, D.C. – Small firm establishment births are the most important
factor propelling growth in gross state product, state personal income, and
total state employment. These findings are contained in a study released today
by the Office of Advocacy of the U.S. Small Business Administration. “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 formations.” Dr. Moutray presented the study at the National Association of Regional
Councils’ National Conference of Regions 2007, where he served as a panelist. The Office of Advocacy, the “small business watchdog” of the federal
government, examines the role and status of small business in the economy and
independently represents the views of small business to federal agencies,
Congress, and the President. It is the source for small business statistics
presented in user-friendly formats, and it funds research into small business
issues. For more information and a complete copy of the report, visit the Office of
Advocacy website at
Contact: John
McDowell, (202) 205-6941
SBA Number: 07-2 ADVO
Press Kit
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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit
www.sba.gov/advo, or call (202) 205-6533.