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ABSTRACT This paper investigates the role of the business size distribution on income and employment growth in U.S. counties from 1990 to 2000. We measure the business size distribution as the share of employees across nine establishment size categories that range from microfirms (one to four employees) to large firms (1,000+ employees) and using three indices similar to a Gini coefficient. Results show that the business size distribution has a significant impact on county-level growth patterns. Employment shares in small firms increase employment growth, but decrease income growth. One possible conclusion suggests policies emphasizing small firms and entrepreneurship during times of high unemployment. [ABSTRACT FROM AUTHOR]

ABSTRACT We examine the contribution to economic growth of entrepreneurial marketplace information within a regional endogenous growth framework. Entrepreneurs are posited to provide an input to economic growth through the information revealed by their successes and failures. We empirically identify this information source with the regional variation in establishment births and deaths. To account for the potential endogeneity caused by forward-looking entrepreneurs, we utilize instruments based on historic mining activity. We find that the information spillover component of local establishment birth and death rates have significant positive effects on subsequent entrepreneurship and employment growth for U.S. counties and metropolitan areas. [ABSTRACT FROM AUTHOR]