UW-Madison UW-Madison

Staff Paper No. 514 - Abstract

The Role of Microenterprises in Economic Growth:A Panel Study of Wisconsin Counties 1977 to 1997

Steven C. Deller [scdeller@wisc.edu]

Staff Paper No. 514, September 2007, 24p.


In this study I examine the role of microenterprises (firms with between one and four employees) in Wisconsin economic growth. Using a panel of Wisconsin counties from 1977 to 1997 I estimate an expanded Carlino-Mills type model of growth. Results suggest that nearly 50 percent of all businesses in Wisconsin are microenterprises and this share is relatively stable over time. Results also indicate that a higher percentage of businesses classified as microenterprises tend to be associated with counties with lower population levels, slower population growth, but higher levels of employment and income growth. Results also vary by type of industry. These results suggest that care must be taken when promoting microenterprises as a major engine of economic growth: results vary by measure of economic growth as well as type of industry.
Last updated on Mon, Oct 1, 2007 10:15am