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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26221

Title: The New Industrial Organization and Small Business
Authors: Kwoka Jr., John E.
White, Lawrence J.
Issue Date: 1-Mar-2000
Series/Report no.: EC-00-03
Abstract: The small business sector is an important part of the American economic landscape, in both absolute and relative terms. Despite its absolute growth, however, the sector accounts for a diminishing share of private sector activity. But its importance, and changes in importance, vary across industrial sectors of the economy. Drawing on the theoretical and empirical insights developed in recent books by John Sutton, we suggest that the presence or absence of endogenous strategic behaviors of the larger firms with respect to advertising, promotion, research and development, and other sunk cost expenditures may well play an important role in explaining the differing levels of small business importance, both cross-sectionally and over time. We conclude the paper with suggestions for research directions that could shed further light on these ideas.
URI: http://hdl.handle.net/2451/26221
Appears in Collections:Economics Working Papers

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