Small vs. young firms across the world: contribution to employment, job creation, and growth

Meghana Ayyagari, Asli Demirguc-Kunt and Vojislav Maksimovic

No 5631, Policy Research Working Paper Series from The World Bank

Abstract: This paper investigates the contribution of small firms to employment, job creation, and growth in developing countries. While small firms (<20 employees) have the smallest share of aggregate employment, the SME sector's (<100 employees) contribution is comparable to that of large firms. Small firms have the largest shares of job creation, and highest sales growth and employment growth, even after controlling for firm age. Large firms, however, have higher productivity growth. Conditional on size, young firms are the fastest growing and large mature firms have the largest employment shares but small young firms have higher job creation rates.

Keywords: Labor Markets; Microfinance; Small Scale Enterprise; Labor Policies; Access to Finance (search for similar items in EconPapers)
Date: 2011-04-01
New Economics Papers: this item is included in nep-bec, nep-dev, nep-ent, nep-lab and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (126)

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