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Who creates jobs in developing countries?

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  • Meghana Ayyagari
  • Asli Demirguc-Kunt
  • Vojislav Maksimovic

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 small and medium enterprise 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. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Meghana Ayyagari & Asli Demirguc-Kunt & Vojislav Maksimovic, 2014. "Who creates jobs in developing countries?," Small Business Economics, Springer, vol. 43(1), pages 75-99, June.
    • Handle: RePEc:kap:sbusec:v:43:y:2014:i:1:p:75-99
    DOI: 10.1007/s11187-014-9549-5
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    More about this item

    Keywords

    Small and medium enterprises; Employment; Job creation; Growth; L26;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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