Estimating the capital gap for small businesses in New York city

Abstract

Previous research suggests that inefficiencies in the small business market exist surrounding the availability of capital by Small and Microenterprises (SMMEs). Using data from the 1992 Characteristics of Business Owners Survey (CBO), the 2002 Survey of Business Owners (SBO), and the 2003 Survey of Small Business Finance (SSBF) this paper empirically estimates the "capital gap"- that is the unmet capital demand for business by SMMEs. We find that there is in fact a capital gap as the supply of capital available in the SMME market is not large enough to meet market demand. Given the importance of small businesses to economic vitality, growth, and recovery of the United States economy, the research provides critical and timely findings for policymakers and public finance managers seeking economic development and recovery

Citation

Servon, L.J., Visser, M.A. and Fairlie, R.W. (2011), "Estimating the capital gap for small businesses in New York city", Journal of Public Budgeting, Accounting & Financial Management, Vol. 23 No. 4, pp. 451-477. https://doi.org/10.1108/JPBAFM-23-04-2011-B001