Revisiting the “Missing Middle”: Productivity Analysis

Hien Thu Pham and Shino Takayama ()
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Hien Thu Pham: School of Economics, The University of Queensland, https://economics.uq.edu.au

No 580, Discussion Papers Series from University of Queensland, School of Economics

Abstract: This paper investigates empirically the relationship between firm size and production effi- ciency and inefficiency associated with the production scale. We study the possible sources of the missing middle phenomenon, which refers to the fact that most employment in developing countries is located in either small-sized or large-sized firms. Using Vietnamese data, we show that middle-sized firms’ production efficiencies tend to be lower than small-sized or large-sized firms in most of the manufacturing industries, that the least efficient firm tends to be middle-sized, and that efficiency scores are more diverse for middle-sized firms, which is arguably associated with the uncertainty that a small firm faces when increasing its size. Our work also indicates that the large-sized firms may be unable to fully utilize their inputs.

Keywords: firm size distribution; missing middle; productivity; efficiency; data envelopment analysis; free disposal hull (search for similar items in EconPapers)
JEL-codes: D21 D22 L25 (search for similar items in EconPapers)
Date: 2017-04-17
New Economics Papers: this item is included in nep-bec, nep-eff, nep-sea and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:580

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