Document Type

Working Paper

Publication Date

6-8-2012

SSRN Discipline

PSN Subject Matter eJournals; Experimental & Empirical Studies eJournals; LSN Subject Matter eJournals; ERPN Subject Matter eJournals; Tax Law & Policy eJournals; ERN Subject Matter eJournals; Management Research Network; Economics Research Network; Legal Scholarship Network; Public Choice & Political Economy eJournals; Political Economy - International eJournals; Entrepreneurship Research & Policy Network; Law School Research Papers - Legal Studies; Law & Society eJournals; Law & Society: Public Law eJournals; Political Science Network; Political Economy - Development eJournals

Abstract

What is "small" in the eyes of the law In fact there is not one standard definition Current lax legal definitions of firm's size are inconsistent and overinclusive They result in data distortion that reinforces favoritism toward small entities as studies on the contribution of small business to the economy are greatly dependent on those studies' delineation of the term "small" Therefore I argue that the current focus on size in legal definitions is a waste of time and money In this time of huge deficits and rise in economic inequality a lot of money is being spent based on the entrenched belief that small firms are the essence of our economy which is not necessarily trueThis paper lays out the policy considerations that underlie the favorable regulatory treatment granted to small firms throughout the law It provides a comprehensive survey of legal definitions of small entities and concludes that the historical emphasis on magnitude and the creation of legal demarcations concentrated on "smallness" are erroneous The recent integration of federal commerce and trade agencies is the first step toward this proposed shift from sizecentered to goaldriven approach

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