Small Business Growth in the Short Run

This paper examines the determinants of short run employment growth in very small firms in the Services sector. The study shows evidence of non linearities in the growth-size relationship, and it is argued that these non linearities reflect the short run constraints that small firms face in adjusting to demand shocks. The paper also suggests that there are other systematic influences on growth apart from size. The paper draws on survey evidence from the Northern Region of the United Kingdom.