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Managerial Tenure, Business Age And Small Business Dynamics

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  • James A Schmitz
  • Thomas J Holmes

Abstract

This paper studies a Census Bureau survey of the small business sector that contains information on business age, business size and other proxies for business quality, information, typically available on business data sets, as well as proxies for the quality of the manager of each business, information that is not common to such data sets. One of the key proxies for managerial quality is the length of time the manager has been running the business, that is, managerial tenure. With proxies for both the underlying quality of each business and for the quality of the manager running the business, we are able to begin separating the influences of the manager from that of the underlying business on such factors as business discontinuance and business transfer. An example of the questions we explore is: Holding business quality fixed, what is the impact of the manager on the probability of business discontinuance? Regarding this question, we find that managers have a large impact on the course of their businesses, in particular, among businesses of the same age, managerial tenure has a significant impact on the probability of business discontinuance and transfer.

Suggested Citation

  • James A Schmitz & Thomas J Holmes, 1992. "Managerial Tenure, Business Age And Small Business Dynamics," Working Papers 92-11, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:92-11
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    File URL: https://www2.census.gov/ces/wp/1992/CES-WP-92-11.pdf
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    Cited by:

    1. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers 95-5, Center for Economic Studies, U.S. Census Bureau.
    2. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
    3. Ollinger, Michael & Nguyen, Sang V., 2003. "Empirical Evidence On The Motives For Mergers And Acquisitions In Eight Food Industries," 2003 Annual meeting, July 27-30, Montreal, Canada 22176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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