Skip to main content

Advertisement

SpringerLink
Log in

One size does not fit all: evaluating the impact of microenterprise measurement on policy evaluation

  • Original Paper
  • Published:
The Annals of Regional Science Aims and scope Submit manuscript

Abstract

Researchers and economic development practitioners regard microenterprises (MEs) as pivotal actors for economic development, poverty alleviation, and job creation. Notwithstanding the importance of MEs in the economy, there is no consistent definition of MEs, and thus, there is no consensus on the appropriate measurement and criteria that should be used to evaluate MEs formation. Two of the most commonly accepted standards criteria to determine MEs are the number of employees and total annual revenues. Although there is a growing body of research conducted on ME formation using the employment criteria to determine the firm size, fewer studies have used the revenue criteria. These criteria will be compared in a regional activity model at different units of geographic scale (state, county, and census tract level) using data from US businesses. Results suggest that there are no statistically significant changes in the estimated model when the criteria are changed for the same geographic unit of scale. However, for the same criteria (employment-based or revenue-based), a change in the unit of geographic aggregation produces different and sometimes contradictory results. These results imply that evaluations of MEs and their factors are more sensitive to scale than to criteria, raising awareness that for proper program evaluation, the unit of data aggregation matters.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Acs ZJ, Armington C (2004) Employment growth and entrepreneurial activity in cities. Reg Stud 38(8):911–927

    Article  Google Scholar 

  • Acs ZJ, Audretsch DB, Lehmann EE (2013) The knowledge spillover theory of entrepreneurship. Small Bus Econ pp 757–774

  • Acs ZJ, Carlsson B, Karlsson C (1999) Entrepreneurship, small and medium-sized enterprises and the macroeconomy. Cambridge University Press, Cambridge

    Google Scholar 

  • Acs ZJ, Szerb L (2007) Entrepreneurship, economic growth and public policy. Small Bus Econ 28(2–3):109–122

    Article  Google Scholar 

  • Acs ZJ, Virgill N (2009) Entrepreneurship in developing countries. Number 2009,023 in Jena economic research papers. Jena: Universität Jena und Max-Planck-Institut für Ökonomik

  • Anselin L (1988) Lagrange multiplier test diagnostics for spatial dependence and spatial heterogeneity. Geogr Anal 20(1):1–17

    Article  Google Scholar 

  • Anselin L (1995) Local indicators of spatial association-LISA. Geogr Anal 27(2):93–115

    Article  Google Scholar 

  • Anselin L (2003) Spatial externalities, spatial multipliers, and spatial econometrics. Int Reg Sci Rev 26(2):153–166

    Article  Google Scholar 

  • Anselin L, Arribas-Bel D (2013) Spatial fixed effects and spatial dependence in a single cross-section. Pap Reg Sci 92(1):3–17

    Article  Google Scholar 

  • Anselin L, Bera AK, Florax R, Yoon MJ (1996) Simple diagnostic tests for spatial dependence. Reg Sci Urban Econ 26(1):77–104

    Article  Google Scholar 

  • Arbia G (2012) Spatial data configuration in statistical analysis of regional economic and related problems. Springer Science & Business Media. Google-Books-ID: SNHyCAAAQBAJ, Berlin

    Google Scholar 

  • Armendáriz B, Morduch J (2010) The economics of microfinance. MIT Press, Cambridge

    Google Scholar 

  • Armington C, Acs ZJ (2002) The determinants of regional variation in new firm formation. Reg Stud 36(1):33–45

    Article  Google Scholar 

  • Aroca P, Hewings GJD (2009) Microcredit impact assessment: The Brazilian and Chilean cases. Panorama Socioeconómico 27(39):100

    Google Scholar 

  • Audretsch DB, Fritsch M (2002) Growth regimes over time and space. Reg Stud 36(2):113–124

    Article  Google Scholar 

  • Avelino AFT, Baylis K, Honey-Rosés J (2016) Goldilocks and the raster grid: selecting scale when evaluating conservation programs. PLoS ONE 11(12):e0167945

    Article  Google Scholar 

  • Bates T (1990) Entrepreneur human capital inputs and small business longevity. Rev Econ Stat pp 551–559

  • Borjas GJ (1986) The self-employment experience of immigrants. J Hum Resour 21(4):485–506

    Article  Google Scholar 

  • Chung S, Hewings GJD (2019) A short exercise to assess the effects of temporal and spatial aggregation on the amounts of spatial spillovers. Springer Singapore, Singapore, pp 35–56

    Google Scholar 

  • Contreras SA, Greenlee AJ (2021) Evaluating the effectiveness of chilecompra’s entrepreneurship centers policy. Regional Science Policy & Practice, 1–21

  • Cooke P, Wills D (1999) Small firms, social capital and the enhancement of business performance through innovation programmes. Small Bus Econ 13(3):219–234

    Article  Google Scholar 

  • Cooper AC, Gimeno-Gascon FJ, Woo CY (1994) Initial human and financial capital as predictors of new venture performance. J Bus Ventur 9(5):371–395

    Article  Google Scholar 

  • Decker R, Haltiwanger J, Jarmin R, Miranda J (2014) The role of entrepreneurship in us job creation and economic dynamism. J Econ Perspect 28(3):3–24

    Article  Google Scholar 

  • Deller SC (2010) Spatial variations in the role of microenterprises in economic growth. Rev Reg Stud 40(1):71–97

    Google Scholar 

  • Deller SC, McConnon JC Jr (2009) Microenterprises and economic growth: a panel study of the US states 1977–1997. Appl Econ Lett 16(13):1307–1312

    Article  Google Scholar 

  • Demirgüç-Kunt A, Beck T, Levine R (2003) Small and medium enterprises, growth, and poverty: cross-country evidence. The World Bank, Washington, DC

    Book  Google Scholar 

  • Florax RJ, Folmer H, Rey SJ (2003) Specification searches in spatial econometrics: the relevance of Hendry’s methodology. Reg Sci Urban Econ 33(5):557–579

    Article  Google Scholar 

  • Gehlke CE, Biehl K (1934) Certain effects of grouping upon the size of the correlation coefficient in census tract material. J Am Stat Assoc 29(185A):169–170

    Article  Google Scholar 

  • Georgellis Y, Wall HJ (2000) What makes a region entrepreneurial? Evidence from Britain. Ann Reg Sci 34(3):385–403

    Article  Google Scholar 

  • Georgellis Y, Wall HJ (2000b) Who are the self-employed?. Review 82

  • Getis A, Ord JK (1992) The analysis of spatial association by use of distance statistics. Geogr Anal 24(3):189–206

    Article  Google Scholar 

  • Goetz SJ, Partridge M, Deller SC, Fleming D (2010) Evaluating U . S . rural entrepreneurship policy. J Reg Anal Policy 40(1):20–33

    Google Scholar 

  • Goetz SJ, Rupasingha A (2009) Determinants of growth in non-farm proprietor densities in the US, 1990–2000. Small Bus Econ 32(4):425–438

    Article  Google Scholar 

  • Henderson J, Low S, Weiler S (2007) The drivers of regional entrepreneurship in rural and metro areas. Entrepreneurship and local economic development, 81–102

  • Hennerdal P, Nielsen M (2017) A multiscalar approach for identifying clusters and segregation patterns that avoids the modifiable areal unit problem. Ann Am Assoc Geogr 107(3):555–574 (555)

    Google Scholar 

  • Hui C (2009) A Bayesian solution to the modifiable areal unit problem. In: Hassanien A-E, Abraham A, Herrera F (eds) Foundations of computational intelligence volume 2: approximate reasoning, studies in computational intelligence. Springer, Berlin, pp 175–196

    Chapter  Google Scholar 

  • Iversen J, Jørgensen R, Malchow-Møller N (2008) Defining and measuring entrepreneurship. Found Trends Entrep 4(1):1–63 (1)

    Article  Google Scholar 

  • Jordan JL, Anil B, Munasib A (2010) Community development and local social capital. J Agric Appl Econ 42(1):143–143

    Article  Google Scholar 

  • Kim PH, Aldrich HE, Keister LA (2006) Access (not) denied: the impact of financial, human, and cultural capital on entrepreneurial entry in the United States. Small Bus Econ 27(1):5–22

    Article  Google Scholar 

  • Knight FH (1921) Risk, uncertainty and profit. Houghton Mifflin Company, Boston

    Google Scholar 

  • Low SA (2009) Defining and measuring entrepreneurship for regional research : a new approach

  • Low SA, Isserman AM (2013) Where are the innovative entrepreneurs? Identifying innovative industries and measuring innovative entrepreneurship. Int Reg Sci Rev 0160017613484926–0160017613484926

  • Malecki EJ (1988) New firm startups: key to rural growth. Rural development perspectives: RDP (USA)

  • Malecki EJ (2010) Entrepreneurship in regional and local development. In: Acs ZJ (ed) Entrepreneurship and regional development, pp 32–66. Elgar Reference Collection. International Library of Entrepreneurship, vol. 16. Northampton, Mass. and Cheltenham, U.K.: Elgar

  • Manley D (2014) Scale, aggregation, and the modifiable areal unit problem. In: Fischer MM, Nijkamp P (eds) Handb Reg Sci. Springer, Berlin, pp 1157–1171

    Chapter  Google Scholar 

  • Nelson J, Brewer C (2017) Evaluating data stability in aggregation structures across spatial scales: revisiting the modifiable areal unit problem. Cartogr Geogr Inf Sci 44(1):35–50 (35)

    Article  Google Scholar 

  • Openshaw S (1984) Ecological fallacies and the analysis of areal census data. Environ Plan A 16(1):17–31

    Article  Google Scholar 

  • Openshaw S, Taylor P (1979) A million or so correlation coefficients: three experiments on the modifiable areal unit problem. 127–144. Statistical Applications in the Spatial Sciences. Pion, London

  • Ord JK, Getis A (1995) Local spatial autocorrelation statistics: distributional issues and an application. Geogr Anal 27(4):286–306

    Article  Google Scholar 

  • Rey SJ, Janikas MV (2005) Regional convergence, inequality, and space. J Econ Geogr 5(2):155–176

    Article  Google Scholar 

  • Rey SJ, Montouri BD (1999) US regional income convergence: a spatial econometric perspective. Reg Stud 33(2):143–156

    Article  Google Scholar 

  • Robbins DK, Pantuosco LJ, Parker DF, Fuller BK (2000) An ampirical assessment of the contribution of small business employment to US State economic performance. Small Bus Econ 15(4):293–302

    Article  Google Scholar 

  • Rugimbana R, Kojo Oseifuah E (2010) Financial literacy and youth entrepreneurship in South Africa. Afr J Econ Manag Stud 1(2):164–182

    Google Scholar 

  • Rupasingha A, Contreras S (2014) Factors affecting spatial variation of microenterprises in the rural United States. Am J Entrep 7(2):17

    Google Scholar 

  • Rupasingha A, Goetz SJ (2013) Self-employment and local economic performance: evidence from US counties*. Pap Reg Sci 92(1):141–161

    Google Scholar 

  • Rupasingha A, Goetz SJ, Freshwater D (2002) Social and institutional factors as determinants of economic growth: evidence from the United States counties. Pap Reg Sci 81(2):139–155

    Article  Google Scholar 

  • Rupasingha A, Goetz SJ, Freshwater D (2006) The production of social capital in US counties. J Socio-Econ 35(1):83–101

    Article  Google Scholar 

  • Rupasingha A, Wang K (2017) Access to capital and small business growth: evidence from CRA loans data. Ann Reg Sci 59(1):15–41

    Article  Google Scholar 

  • Schumpeter JA (1961) The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle (1912/1934). Google Scholar

  • Servon LJ (1998) Credit and social capital: the community development potential of US microenterprise programs. Hous Policy Debate 9(1):115–149

    Article  Google Scholar 

  • Su M, Lin M-C, Wen T (2011) Spatial mapping and environmental risk identification

  • Wong DWS (2003) Spatial decomposition of segregation indices: a framework toward measuring segregation at multiple levels. Geogr Anal 35(3):179–194

    Article  Google Scholar 

  • Wong DWS (2004) The modifiable areal unit problem (MAUP). In: Janelle DG, Warf B, Hansen K (eds) WorldMinds: geographical perspectives on 100 problems: commemorating the 100th anniversary of the association of American geographers 1904–2004. Springer, Dordrecht, pp 571–575

    Chapter  Google Scholar 

  • Woolcock M (2001) Microenterprise and social capital: a framework for theory, research, and policy. J Socio-Econ 30(2):193–193

    Article  Google Scholar 

  • Zainol NR, Al Mamun A, Hassan H, Rajennd A, Muniady L (2017) Examining the effectiveness of micro-enterprise development programs in Malaysia. J Int Stud 10(2)

Download references

Acknowledgements

I would like to offer my special thanks to Dr. Geoffrey J.D. Hewings, Dr. Gregory Stanton, and Dr. Andres Vallone for helping me in this paper.

Funding

This work was funded by the National Agency for Research and Development (ANID)/Scholarship Program/DOCTORADO BECAS CHILE/2017 - 72150510.

Author information

Authors and Affiliations

  1. Universidad Catolica del Norte Sede Coquimbo, Coquimbo, Coquimbo, Chile

    Sergio A. Contreras

Authors
  1. Sergio A. Contreras
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sergio A. Contreras.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Contreras, S.A. One size does not fit all: evaluating the impact of microenterprise measurement on policy evaluation. Ann Reg Sci 68, 587–613 (2022). https://doi.org/10.1007/s00168-021-01094-7

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00168-021-01094-7

JEL Classification

Search

Navigation