Firm Growth in Family Businesses-The Role of Entrepreneurial Orientation and the Entrepreneurial Activity
Journal of Small Business Management
This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of state and local governments' support of small businesses in U.S. states. The main purpose of the research is to determine whether state or local government's support positively affects entrepreneurial activity, firm growth, and business owner's optimism in the United States. Systematization of the literary sources and approaches for solving the problem of the impact of government support on
... vernment support on entrepreneurial activity, growth, and optimism indicates that neither the support of state governments nor the support of local governments has a significant impact on the entrepreneurial activity in that state. However, the results show that both the support of state governments and the support of local governments have a significant impact on firm performance and owner's outlook for the future. In the states where there is above-average state or local government support as perceived by the owners, small firms are more successful and at the same time owners are more optimistic for the future. The relevance of the decision of this scientific problem is that, when deciding to support small businesses, governments need to know how this will affect different areas including activity, growth, or owner's morale. Investigation of the topic of the impact of government support on entrepreneurial activity, growth, and optimism in the paper is carried out in the following logical sequence: First, each state is assigned into one of two groups based on their score on state government support. The states that have a score higher than the mean state were assigned into the "High-State Govt Support" group and the others were assigned into the "Low-State Govt Support" group. Then, the two groups were compared in terms of entrepreneurial activity, firm performance, and optimism. Then, the same procedure is followed for local government support. The states that have a score higher than the mean state were assigned into the "High-Local Govt Support" group and the others were assigned into the "Low-Local Govt Support" group. The two groups were compared in terms of entrepreneurial activity, firm performance, and optimism. Methodological tools of the research methods were nonparametric tests for the year 2013. 41 states were examined because of lack of sufficient data for the other states. The paper presents the results of an empirical analysis for small firms in these states, which showed that government support is important for firm growth and owner's optimism. The research empirically confirms and theoretically proves that more state or local government support positively affects firm growth and optimism. The results of the research can be useful for governments that consider supporting small businesses in their region/area.