State Antitrust Activity’s Impact on Small Business Entry

Robert M. Feinberg, April 2012

Purpose

Potential business owners have a lot to debate before starting a business.  For states this leads to the question, does a state’s level of antitrust enforcement have an impact on small business entry?

Overall Findings

The study finds that lower levels of a state’s rate of economic growth (gross state product) and lower state and local tax burdens increase entry.  But the research also found weak evidence for relatively high levels of a state’s antitrust enforcement increasing small business entry.  Small firms view a vigorous anti-cartel policy as a desirable feature of a state’s law enforcement profile.