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Small Manufacturers Hit Harder by Global Conditions
April 3, 2008
Currency exchange rate pressures lead to an increase in the exit rates of very small manufacturers (fewer than 20 employees), finds a report released today by the Office of Advocacy of the U.S. Small Business Administration.
Interestingly, small manufacturers in high-tech industries are more insulated from international competitive pressures than those in other sectors," said Robert Feinberg, professor at American University and author of the paper.
The study, The Impact of International Competition on Small-Firm Exit in U.S. Manufacturing, focused on 1990 to 2004. The author noted little variation in the overall exit rate of small manufacturers over time, but a reasonable amount of variation across firm size and industry.
Factors affecting exit across firm sizes included overall economic activity, labor costs, and whether the firm's industry sector produced consumer goods. Changes in an industry's import share produced mixed results across time periods and firm sizes.
For more information and a complete copy of the report, visit the Office of Advocacy website at http://www.sba.gov/advo.
The Office of Advocacy examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.
The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit http://www.sba.gov/advo, or call (202) 205-6533.