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SMEs and Regional Economic Growth in Brazil

  • Túlio A. Cravo

    ()

    (Dept of Economics, Loughborough University)

  • Adrian Gourlay

    ()

    (Dept of Economics, Loughborough University)

  • Bettina Becker

    ()

    (Dept of Economics, Loughborough University)

This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector.

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File URL: http://www.lboro.ac.uk/departments/sbe/RePEc/lbo/lbowps/SMEs_and_Growth_in_Brazil.pdf
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Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2010_01.

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Date of creation: Jan 2010
Date of revision: Jan 2010
Handle: RePEc:lbo:lbowps:2010_01
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