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Small firms and economic growth in europe

Economic activity in manufacturing industries moved away from large firms toward small firms in many Organization for Economic Cooperation and Development countries during the last two decades. However, the speed of this industrial transformation process has varied considerably across countries. This paper investigates the consequences of lagging behind in this restructuring process in manufacturing. A sample of 14 manufacturing industries in 13 European countries has been constructed for this purpose. It is found that, on average, the employment share of large firms in 1990 has a negative effect on output growth in the subsequent four-year period. This provides support for specific policies introduced during the 1980s in European countries stimulating small enterprises. Copyright International Atlantic Economic Society 1998

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File URL: http://hdl.handle.net/10.1007/BF02299356
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Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

Volume (Year): 26 (1998)
Issue (Month): 2 (June)
Pages: 137-146

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Handle: RePEc:kap:atlecj:v:26:y:1998:i:2:p:137-146
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  1. Steven J. Davis & John Haltiwanger & Scott Schuh, 1993. "Small Business and Job Creation: Dissecting the Myth and Reassessing theFacts," NBER Working Papers 4492, National Bureau of Economic Research, Inc.
  2. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-46, August.
  3. Carree, Martin & Klomp, Luuk, 1996. " Small Business and Job Creation: A Comment," Small Business Economics, Springer, vol. 8(4), pages 317-22, August.
  4. Cohen, Wesley M & Klepper, Steven, 1996. "A Reprise of Size and R&D," Economic Journal, Royal Economic Society, vol. 106(437), pages 925-51, July.
  5. You, Jong-Il, 1995. "Small Firms in Economic Theory," Cambridge Journal of Economics, Oxford University Press, vol. 19(3), pages 441-62, June.
  6. Carlsson, Bo, 1992. "The Rise of Small Business: Causes and Consequences," Working Paper Series 357, Research Institute of Industrial Economics.
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