Small Business Survival Capabilities and Policy Effectiveness: Evidence from Oakland
National Bureau of Economic Research Working Paper Series
; No. 27629, 2020.
Article
in English
| NBER | ID: grc-748574
ABSTRACT
Using unique City of Oakland data during COVID-19, we document that small business survival capabilities vary by firm size as a function of revenue resiliency, labor flexibility, and committed costs. Nonemployer businesses rely on low cost structures to survive 73% declines in own-store foot traffic. Microbusinesses (1-to-5 employees) depend on 14% greater revenue resiliency. Enterprises (6-to-50 employees) have twice-as-much labor flexibility, but face 11%-to-22% higher residual closure risk from committed costs. Finally, inconsistent with the spirit of Chetty-Friedman-Hendren-Sterner (2020) and Granja-Makridis-Yannelis-Zwick (2020), PPP application success increased medium-run survival probability by 20.5%, but only for microbusinesses, arguing for size-targeting of policies.
Full text:
Available
Collection:
Databases of international organizations
Database:
NBER
Type of study:
Experimental Studies
/
Prognostic study
Language:
English
Journal:
National Bureau of Economic Research Working Paper Series
Year:
2020
Document Type:
Article
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