IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10233.html
   My bibliography  Save this paper

Deconstructing the Missing Middle : Informality and Growth of Firms in Sub-Saharan Africa

Author

Listed:
  • Abreha,Kaleb Girma
  • Cirera,Xavier
  • Davies,Elwyn Adriaan Robin
  • Fattal Jaef,Roberto N.
  • Maemir,Hibret Belete

Abstract

This paper characterizes the firm size distribution by exploiting establishment-level censusescovering both formal and informal firms in Sub-Saharan Africa. The paper finds a "missing middle" in theemployment-based size distribution of firms in four Sub-Saharan African countries. This "missingmiddle" hinges on the inclusion of informal firms, and it is not explained by state- or foreign-owned firms at thetop of the size distribution, nor does it emerge from the size distribution of entrants. The paper reconciles theseempirical results with a model of firm dynamics with endogenous informality and shows that calibrated values ofentry barriers and productivity-dependent idiosyncratic distortions generate a "missing middle" that isconsistent with its underlying drivers in the data.

Suggested Citation

  • Abreha,Kaleb Girma & Cirera,Xavier & Davies,Elwyn Adriaan Robin & Fattal Jaef,Roberto N. & Maemir,Hibret Belete, 2022. "Deconstructing the Missing Middle : Informality and Growth of Firms in Sub-Saharan Africa," Policy Research Working Paper Series 10233, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10233
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099924211162242314/pdf/IDU0b070c6340f4d10403d08bd90f758ec6dcf49.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.