Micro and Small Enterprises (MSEs) in Urban Economies: A Comparative Study of Egypt and Turkey at the Province Level

Fatma El-Hamidi () and Cem Baslevent ()
Additional contact information
Fatma El-Hamidi: University of Pittsburgh
Cem Baslevent: Istanbul Bilgi University

No 761, Working Papers from Economic Research Forum

Abstract: This paper examines how businesses operating in areas with differing rates of urbanization differ from each other with regard to firm characteristics such as firm size and the sector of economic activity. A sample of 4,136 MSE’s in Egypt and another of 4,776 MSE’s in Turkey are used in the analysis. Empirical findings show that manufacturing is more concentrated in provinces where the rate of urbanization is at a medium level, and that trade is a less likely outcome than other sectors? the higher the level of urbanization. Other key findings: the level of urbanization does not have an effect on firm size in Turkey, but has a significant effect on firm size in Egypt, such that firm size tends to increase with urbanization; business dependence (i.e. income from MSE is the only source of income) tends to decrease with urbanization in Turkey and Egypt alike The results of the study may shed light on the natures of policies recommended to promote MSEs in densely populated areas with large numbers of potential workers. Two policy recommendations are 1) any assistance programs must realize that entrepreneurs are heterogeneous groups, with different needs and aspiration, requiring different levels of capital and skills. 2) Because of their micro size, most government regulations fail to reach the MSEs. As they grow in size, they become targets for tax collections and other regulations. Therefore, there is a disincentive to expand beyond a certain limit. Policies that encourage expansion and growth with tax breaks or credits will definitely support the growth of the MSEs.

Pages: 31
Date: 2013-06, Revised 2013-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published by The Economic Research Forum (ERF)

Downloads: (external link)
http://erf.org.eg/wp-content/uploads/2014/07/761.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://erf.org.eg/wp-content/uploads/2014/07/761.pdf [301 Moved Permanently]--> https://erf.org.eg/wp-content/uploads/2014/07/761.pdf)
http://bit.ly/2mb7Gjv (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:761

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().