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The Growth and Decline of Small firms In Developing Countries

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  • Alexander Coad

    ()

  • Jagannadha Pawan Tamvada

    ()

Abstract

Empirical work on micro and small firms has focused on developed countries. The little work that exists on developing countries is all too often based on small samples taken from ad hoc questionnaires. The census data we analyze are fairly representative of the structure of small business in India. Consistent with prior research on developed countries, size and age have a negative impact on firm growth in the majority of specifications. The decision to export is a double-edged sword – if successful it can accelerate the growth of successful firms, but it can also increase the probability of decline. While proprietary ownership results in faster growth, enterprises managed by women are less likely to grow and more likely to decline. Although many small firms are able to convert knowhow into commercial success, we find that many others do not have any technical knowledge and some are unable to use it to their benefit.

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Paper provided by Philipps University Marburg, Department of Geography in its series Papers on Economics and Evolution with number 2008-08.

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Date of creation: Oct 2008
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Handle: RePEc:esi:evopap:2008-08

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Keywords: Entrepreneurship; Developing countries; Micro and Small businesses; Firm growth; Firm age; Barriers to growth; Declining firms; Female entrepreneurs Length 32 pages;

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Citations

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Cited by:
  1. Coad, Alex, 2010. "Investigating the exponential age distribution of firms," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, Kiel Institute for the World Economy, vol. 4(17), pages 1-30.
  2. Giorgio Barba Navaretti & Davide Castellani & Fabio Pieri, 2012. "Age and firm growth. Evidence from three European countries," Working Papers, Department of Applied Economics II, Universidad de Valencia 1217, Department of Applied Economics II, Universidad de Valencia.
  3. Alex Coad, 2008. "The exponential age distribution and the Pareto firm size distribution," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2008-072, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Alex Coad & Jaganaddha Tamvada, 2012. "Firm growth and barriers to growth among small firms in India," Small Business Economics, Springer, Springer, vol. 39(2), pages 383-400, September.

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