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SMEs, Growth, and Poverty

Listed author(s):
  • Thorsten Beck
  • Asli Demirgüç-Kunt

This paper explores the relationship between the relative size of the Small and Medium Enterprise (SME) sector, economic growth, and poverty alleviation using a new database on the share of SME labor in the total manufacturing labor force. Using a sample of 45 countries, we find a strong, positive association between the importance of SMEs and GDP per capita growth. The data do not, however, confidently support the conclusions that SMEs exert a causal impact on growth. Furthermore, we find no evidence that SMEs alleviate poverty or decrease income inequality.

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File URL: https://openknowledge.worldbank.org/bitstream/handle/10986/11278/298980PAPER0VP02681private.pdf?sequence=1
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Paper provided by The World Bank in its series World Bank Other Operational Studies with number 11278.

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Date of creation: Feb 2004
Handle: RePEc:wbk:wboper:11278
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