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ABSTRACT
The purpose of this paper is to explore the relationship of small- to medium-sized enterprise (SME) characteristics and performance. The study draws on the Census Bureau 's Survey of Business Owners (SBO) Public Use Microdata Sample (PUMS). SBO response variables regarding owner demographics, business acquisition, and business performance are the outcome variables of interest in this study. A one-way analysis of variance (ANOVA) is applied to test whether or not there are differences across SMEs based on firm size. The results provide some interesting differences across the SME firm size groups. In particular, smaller SMEs have different characteristics regarding owner demographics, business acquisition methods, and business performance metrics compared to larger SMEs. The study concludes with some future research directions.
Keywords: SME Size, Owner Demographics, Business Acquisition, Performance.
INTRODUCTION
Small- and medium-sized business owners make important contributions to business creation and growth in America's economy. Understanding the characteristics of these business owners and their business may shed light on the importance to measuring an economy's overall well-being (Lichtenstein 2014). A number of studies have examined small- and medium-sized enterprises (SMEs) relative to size and owner demographics (Blackburn, Hart, & Wainwright 2013); business acquisition (Fairlie & Robb 2009); and performance (Mittelstaedt, Harben, & Ward 2003; Wincent 2005; Wolff & Pett 2000). However, few studies have explored the relationship between demographics and business acquisition with measures of performance as demonstrated by sales and employee efficiency with regard to sales for SMEs (Blackburn, Hart, & Wainwright 2013; Pett & Wolff 2016).
The intention of this paper is to contribute to the growing body of literature exploring the relationship between SME characteristics and performance. Moreover this research explores the relationship between the difference in owner demographics (for example, gender, education level, and age), business acquisition (for example, founded, purchased, inherited, or transferred/gifted), and business performance (for example, sales, sales per payroll, and sales per employee) based on the size of the SME firm. The paper begins with theoretical development which establishes the relationships of the constructs being examined within this study in relation to SME size. Following next is a brief literature review to develop the theory establishing the relationships of the constructs being examined as they relate to SME size. A discussion of the unique data...