Public Policy and Small and Medium Enterprise Development

Charles Harvie () and Boon-Chye Lee ()
Additional contact information
Charles Harvie: University of Wollongong, http://business.uow.edu.au/econ/who/index.html
Boon-Chye Lee: University of Wollongong, http://business.uow.edu.au/econ/who/index.html

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: We review the policy arguments in favour of assisting SMEs in various areas of their operations. Our review suggests that many of the arguments put forward for subsidising SME activities (as distinct from some activities of firms regardless of size) are not economically justified. Nonetheless, it is widely acknowledged that SMEs suffer from disadvantage relative to large firms, principally in the areas of access to information and technology. We then study the possibilities offered by networks in helping SMEs deal with the disadvantages they experience. Our examination indicates that there are benefits that firms can derive from participating in networks. Further, because networks can assist firms overcome some of their inherent disadvantages, they can become less reliant on public assistance and more able to compete on an equal footing with larger firms once the initial impetus is provided for the formation of cooperative networks that can enable firms to compete more effectively.

Keywords: small and medium enterprises; public policy; government intervention; networks (search for similar items in EconPapers)
Pages: 24 pages
Date: 2003
New Economics Papers: this item is included in nep-ent
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