In the Name of Entrepreneurship?

In the Name of Entrepreneurship?: The Logic and Effects of Special Regulatory Treatment for Small Business

Susan M. Gates
Kristin J. Leuschner
Copyright Date: 2007
Edition: 1
Published by: RAND Corporation
Pages: 368
https://www.jstor.org/stable/10.7249/mg663emkf
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  • Book Info
    In the Name of Entrepreneurship?
    Book Description:

    What are the differential effects of regulation and policy on small businesses? What is the impact of special regulatory treatment for small businesses? This book sheds light on these issues through analysis of the regulatory and public policy environment with regard to small businesses, including focused studies in four key areas: health insurance, workplace safety, corporate governance, and business organization.

    eISBN: 978-0-8330-4395-5
    Subjects: Law, Health Sciences, Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-vi)
  3. Table of Contents
    (pp. vii-xiv)
  4. Figures
    (pp. xv-xvi)
  5. Tables
    (pp. xvii-xviii)
  6. Acknowledgments
    (pp. xix-xx)
  7. Abbreviations
    (pp. xxi-xxvi)
  8. CHAPTER ONE Introduction
    (pp. 1-16)

    Small businesses are an important feature of the U.S. political and economic landscape. Small businesses (defined as firms with fewer than 500 employees) account for almost half of all gross revenues generated by U.S. businesses, employ half of all private-sector workers, and generate between 60 and 80 percent of net new jobs. Entrepreneurship is generally viewed as an engine of technological progress and economic growth. It is also an important element of the American dream: a means for those who have little more than ambition and a good idea to improve their lot in life. Not surprisingly, the interests of...

  9. CHAPTER TWO The Impact of Regulation and Litigation on Small Businesses and Entrepreneurship: An Overview
    (pp. 17-68)
    Lloyd Dixon, Susan M. Gates, Kanika Kapur, Seth A. Seabury and Eric Talley

    This chapter summarizes key differences between large and small firms in the way the legal and regulatory environments affect them. These differences stem from variations in laws and regulations by firm size, in implementation, and in business response. The chapter examines the regulatory and policy environments in four key areas: corporate and securities law, environmental law, employment law and regulation, and HI regulation. These four areas cover a significant slice of regulatory activity that is important to small business and entrepreneurship. HI is the number-one concern of small businesses today, and HI regulations are designed to address these concerns. Policymakers...

  10. CHAPTER THREE State Health-Insurance Mandates, Consumer-Directed Health Plans, and Health Savings Accounts: Are They a Panacea for Small Businesses?
    (pp. 69-106)
    Susan M. Gates, Kanika Kapur and Pinar Karaca-Mandic

    Small firms in the United States that seek to offer HI to their employees have historically reported problems with the availability and affordability of their options. The cost of HI has been the primary concern of small-business owners for several decades. In 2004, two-thirds of small-business owners listed health-care costs as a critical problem—a proportion that increased by 18 percentage points between 2000 and 2004 (NFIB, 2004). Small businesses are likelier to report problems with their health-care availability and costs than larger businesses (Charles Brown, Hamilton, and Medoff, 1990; McLaughlin, 1993; Fronstin and Helman, 2000). Extending HI to workers...

  11. CHAPTER FOUR Small Businesses and Workplace Fatality Risk: An Exploratory Analysis
    (pp. 107-142)
    John Mendeloff, Christopher Nelson, Kilkon Ko and Amelia Haviland

    In 2002, some 56 percent of Americans were employed in businesses with fewer than 100 workers. It has long been argued that the burdens of safety and health regulation fall more heavily on these firms. Adopting prevention technologies and processes often involves considerable fixed costs, which are more difficult for smaller operations to absorb. Similarly, small businesses are less likely than their larger counterparts to be able to hire in-house safety experts and often lack the resources to remain aware of voluminous and changing safety regulations.

    Concern about regulatory burdens on small businesses has not escaped the attention of policymakers....

  12. CHAPTER FIVE Sarbanes-Oxley’s Effects on Small Firms: What Is the Evidence?
    (pp. 143-168)
    Ehud Kamar, Pinar Karaca-Mandic and Eric Talley

    This chapter presents an overview of the regulatory regime that SOX (P.L. 107-204) created and its implications for small firms. We review the available evidence in three distinct domains: compliance costs, stock-price reactions, and firms’ decisions to exit regulated securities markets.

    SOX was enacted in 2002 to strengthen corporate governance and restore investor confidence after a series of financial debacles involving some of the most prominent firms in the Unites States, including Enron, Tyco, and WorldCom. SOX and the rules implementing it have transformed the reporting obligations of public firms. Most importantly, SOX requires management and an outside auditor to...

  13. CHAPTER SIX Do the Owners of Small Law Firms Benefit from Limited Liability?
    (pp. 169-204)
    John A. Romley, Eric Talley and Bogdan Savych

    Legal liability is a significant concern for the owners of businesses that supply legal, accounting, and other professional services.¹ Adverse judgments or settlements against a professional firm might be so costly as to put the firm out of business, and the costs of resolving disputes alone can seriously impact a firm’s bottom line. Moreover, professional errors and omissions (“malpractice”) represent a unique and significant source of liability exposure for professional-service firms. Everyday experience and a vast body of research attest to the importance of malpractice liability to professionals generally.² Legal liability, furthermore, can pose a threat not just to the...

  14. CHAPTER SEVEN Data Resources for Policy Research on Small Businesses
    (pp. 205-240)
    Amelia Haviland and Bogdan Savych

    Historically, data collected on U.S. businesses have focused almost exclusively on large firms (typically those with at least 250 employees). As a result, researchers interested in small businesses and entrepreneurship have been strongly constrained in their ability to carry out empirical, policy-related research. Ongoing concerns about the lack and quality of data on small firms led to a conference on data sources related to entrepreneurship (the Kauffman Symposium on Entrepreneurship Data, November 10–11, 2004) and to the creation of a National Academy of Sciences panel on federal business statistics, which issued its final report in 2007 (Haltiwanger, Lynch, and...

  15. CHAPTER EIGHT Conclusions
    (pp. 241-252)

    In this book, we have examined what is currently known about the effect of government regulation on small businesses in four key regulatory areas: corporate securities, environmental protection, employment, and HI. In examining these general areas, and specific topics in depth, we have gleaned new insight into the implications of public policy for small businesses and entrepreneurship.

    There is general recognition that public policy can have both intended and unintended effects on small businesses and that the effects of policies may differ by firm size. This recognition has led to a variety of special considerations for small businesses in the...

  16. APPENDIX A Criteria Used to Define Small Business in Determining Thresholds
    (pp. 253-292)
    Ryan Keefe, Susan M. Gates and Eric Talley
  17. APPENDIX B Methodology for Analysis of Small Businesses and Workplace Fatality Risk
    (pp. 293-300)
    John Mendeloff, Christopher Nelson, Kilkon Ko and Amelia Haviland
  18. APPENDIX C Regression Analysis for Analysis of Small Businesses and Workplace Fatality Risk
    (pp. 301-304)
    John Mendeloff, Christopher Nelson, Kilkon Ko and Amelia Haviland
  19. APPENDIX D Firms’ Reasons to Go Private or Go Dark After Sarbanes-Oxley
    (pp. 305-306)
    Ehud Kamar, Pinar Karaca-Mandic and Eric Talley
  20. References
    (pp. 307-342)