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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.

Suggested Citation

  • Manuel Garcia-Santana & Roberto Ramos, 2012. "Dissecting the Size Distribution of Establishments Across Countries," Working Papers wp2012_1204, CEMFI.
  • Handle: RePEc:cmf:wpaper:wp2012_1204

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    References listed on IDEAS

    1. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    2. Laura Alfaro & Andrew Charlton & Fabio Kanczuk, 2009. "Plant-Size Distribution and Cross-Country Income Differences," NBER Chapters,in: NBER International Seminar on Macroeconomics 2008, pages 243-272 National Bureau of Economic Research, Inc.
    3. Poschke, Markus, 2010. "Skill-Biased Change in Entrepreneurial Technology," IZA Discussion Papers 5202, Institute for the Study of Labor (IZA).
    4. Virgiliu Midrigan & Daniel Yi Xu, 2014. "Finance and Misallocation: Evidence from Plant-Level Data," American Economic Review, American Economic Association, vol. 104(2), pages 422-458, February.
    5. Francisco J. Buera & Joseph P. Kaboski & Yongseok Shin, 2011. "Finance and Development: A Tale of Two Sectors," American Economic Review, American Economic Association, vol. 101(5), pages 1964-2002, August.
    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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    Cited by:

    1. François Gourio & Nicolas Roys, 2014. "Size‐dependent regulations, firm size distribution, and reallocation," Quantitative Economics, Econometric Society, vol. 5, pages 377-416, July.

    More about this item


    Plant size distribution; enterprise environment.;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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