Abstract
The purpose of this study was to investigate the influence of some aggregate domes-tic economic forces (i.e., government consumption expenditures and gross Investment; gross private domestic investment and personal consumption expenditures) on the growth of micro firms (businesses with fewer than 20 employees) in the U.S. between the years 1988-2012. The study classified micro firms into three categories (a) firms with employment between 0 and 4 employees, (b) firms with employment between 5 and 9 employees, and (c) firms with employment between 10 and 19 employees. In aggregation, the firms are termed “very small enterprises” by the U.S. Census Bureau. The data for the period 1988-2012 was reviewed, analyzed, and subjected to statistical analysis. It was found that a strong positive correlation exists between each of the aggregate domestic forces and the number of micro-firms in each of the three categories of micro-firms as well as all micro-firms in aggregate. The OLS regression results show all macro variables significantly affecting the growth of micro firms in the size range 10-19 employees. The evidence is more mixed in the other two size categories. The stepwise regression results are more mixed.
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