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Dissecting The Size Distribution Of Establishments Across Countries

We present a detailed description of cross-country differences in the size distribution of establishments as measured by Enterprise Surveys of the World Bank (2006-2010). We find that poorer countries tend to have smaller establishments, and hence a higher proportion of employment is allocated to such plants. We also find that, conditional on the level of per capita GDP, there is still a wide variation in the size distribution of establishments. We show that financial frictions and other costs imposed on the business environment can account for a sizeable part of such variation. Additionally, we exploit the richness of the data-set to document cross-sector differences in the size distribution of establishments. We show that establishments in manufacturing and construction tend to be larger on average than in retail and other services.

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Paper provided by CEMFI in its series Working Papers with number wp2012_1204.

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Date of creation: May 2012
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Handle: RePEc:cmf:wpaper:wp2012_1204
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  1. Poschke, Markus, 2010. "Skill-Biased Change in Entrepreneurial Technology," IZA Discussion Papers 5202, Institute for the Study of Labor (IZA).
  2. Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
  3. Virgiliu Midrigan & Daniel Yi Xu, 2010. "Finance and Misallocation: Evidence from Plant-level Data," NBER Working Papers 15647, National Bureau of Economic Research, Inc.
  4. Francisco J. Buera & Joseph Kaboski & Yongseok Shin, 2009. "Finance and Development: A Tale of Two Sectors," NBER Working Papers 14914, National Bureau of Economic Research, Inc.
  5. Laura Alfaro & Andrew Charlton & Fabio Kanczuk, 2008. "Plant-Size Distribution and Cross-Country Income Differences," NBER Working Papers 14060, National Bureau of Economic Research, Inc.
  6. Banerji, Ranadev, 1978. "Average size of plants in manufacturing and capital intensity : A cross-country analysis by industry," Journal of Development Economics, Elsevier, vol. 5(2), pages 155-166, June.
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