Small-Business Survival Capabilities and Fiscal Programs: Evidence from Oakland

Abstract

Using City of Oakland data during COVID-19, we document that small-business components of survival capabilities (i.e., revenue resiliency, labor flexibility, and committed costs) vary by firm size. Nonemployer businesses rely on low-cost structures to survive. Microbusinesses (1–5 employees) depend on 14% greater revenue resiliency. Enterprises (6–50 employees) use labor flexibility to survive but face 10%–20% higher residual closure risk from committed costs. The evidence argues for size targeting of financial support programs, including committed costs and revenue-based lending programs. Supporting the capabilities mapping, we find that the Paycheck Protection Program (PPP) increased medium-run survival probability by 20.5% specifically for microbusinesses.

Details

Author(s):
Publish Date:
November 1, 2021
Publication Title:
J. Fin. & Quantitative Analysis
Publisher:
Cambridge University Press
Format:
Journal Article Volume 56 Issue 7 Page(s) 2500-2544
Citation(s):
  • Robert Bartlett & Adair Morse, Small-Business Survival Capabilities and Fiscal Programs: Evidence from Oakland, 56 J. Fin. & Quantitative Analysis 2500 (2021).
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