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SMEs, Growth, and Poverty

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  • Thorsten Beck
  • Asli Demirgüç-Kunt

Abstract

This paper explores the relationship between the relative size of the Small and Medium Enterprise (SME) sector, economic growth, and poverty alleviation using a new database on the share of SME labor in the total manufacturing labor force. Using a sample of 45 countries, we find a strong, positive association between the importance of SMEs and GDP per capita growth. The data do not, however, confidently support the conclusions that SMEs exert a causal impact on growth. Furthermore, we find no evidence that SMEs alleviate poverty or decrease income inequality.

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Bibliographic Info

Paper provided by The World Bank in its series World Bank Other Operational Studies with number 11278.

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Date of creation: Feb 2004
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Handle: RePEc:wbk:wboper:11278

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Keywords: Private Sector Development - Small and Medium Size Enterprises Finance and Financial Sector Development - Microfinance Poverty Reduction - Poverty Assessment Governance - Governance Indicators Poverty Reduction - Achieving Shared Growth;

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Citations

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Cited by:
  1. Xu Yi & Nezih Guner & Gustavo Ventura, 2005. "Macroeconomic Implications of Size Dependent Policies," 2005 Meeting Papers 530, Society for Economic Dynamics.
  2. Lskavyan, Vahe & Spatareanu, Mariana, 2008. "Host country's governance and the size of foreign investors," Economics Letters, Elsevier, vol. 100(2), pages 258-261, August.
  3. Allen, Franklin & Chakrabarti, Rajesh & De, Sankar & Qian, Jun & Qian, Meijun, 2006. "Financing firms in India," Policy Research Working Paper Series 3975, The World Bank.
  4. P.D. Koellinger & A.R. Thurik, 0000. "Entrepreneurship and the Business Cycle," Tinbergen Institute Discussion Papers 09-032/3, Tinbergen Institute, revised 30 Sep 2009.
  5. Claessens, Stijn, 2005. "Access to financial services: a review of the issues and public policy objectives," Policy Research Working Paper Series 3589, The World Bank.
  6. Maribel Mojica & Tesfa Gebremedhin & Peter Schaeffer, 2009. "An Empirical Analysis of the Link between Entrepreneurship and Economic Growth in West Virginia," Working Papers 200902, Regional Research Institute, West Virginia University.
  7. Alexander Coad & Jagannadha Pawan Tamvada, 2008. "The Growth and Decline of Small firms In Developing Countries," Papers on Economics and Evolution 2008-08, Philipps University Marburg, Department of Geography.
  8. Chung-Hua Shen & Haumin Chu & Yu-Chun Wang, 2012. "Who Furls the Umbrella on Rainy Days? The Role of Bank Ownership Type and Bank Size in SME Lending," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 48(0), pages 184-199, July.
  9. Friedman, Felice B. & Grose, Claire, 2006. "Promoting access to primary equity markets : a legal and regulatory approach," Policy Research Working Paper Series 3892, The World Bank.
  10. Richard Black & Adriana Castaldo, 2009. "Return Migration And Entrepreneurship In Ghana And C�Te D'Ivoire: The Role Of Capital Transfers," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 100(1), pages 44-58, 02.
  11. Esther K. Ishengoma & Robert Kappel, 2008. "Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda," GIGA Working Paper Series 78, GIGA German Institute of Global and Area Studies.

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