Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms
Using data on more than 56,000 enterprises in 90 countries, this paper finds that objective conditions in the business environment vary substantially across firms of different sizes and that there are important non-linearities in their impact on em...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090831130412 http://hdl.handle.net/10986/4224 |
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okr-10986-42242021-04-23T14:02:16Z Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms Aterido, Reyes Hallward-Driemeier, Mary Pages, Carmen ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FORMAL FINANCE ACCOUNTING ADVERSE EFFECTS ALLOCATIVE EFFICIENCY BANK BANKING BENEFITS OF ACCESS BIAS BIASES BRIBE BRIBES BUSINESS DEVELOPMENT BUSINESS ENVIRONMENT BUSINESS OWNER CONSTRAINTS ON ACCESS CONTRACT LABOR CONTRACTING CORRUPTION CREDIT CREDIT MARKET CREDIT MARKETS CREDIT REPORTING CREDITOR DEVELOPMENT BANK DEVELOPMENT ECONOMICS DISPLACEMENT ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC THEORY ECONOMICS EFFECTS EFFICIENCY EMPLOYEE EMPLOYEES EMPLOYMENT EMPLOYMENT GROWTH ENTERPRISE ENTERPRISES ENTREPRENEURIAL ABILITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXCLUSION EXPANSION EXPANSIONS EXTERNAL FINANCE EXTERNAL FUNDS FINANCES FINANCIAL ACCESS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING FIRM FIRM SIZE FIRM SIZES FIXED COSTS FOREIGN FIRMS FORMAL FINANCIAL INSTITUTIONS GOVERNMENT REGULATIONS GROWTH OPPORTUNITIES HIGHER LEVELS OF ACCESS INCENTIVES INCOME INFORMAL ECONOMY INFRASTRUCTURE INNOVATION INPUT PRICE INTEREST INTERNATIONAL BANK INVESTMENT INVESTMENTS JOB CREATION JOB FLOWS JOB SECURITY LABOR LABOR FORCE LABOR MARKET LABOR REGULATIONS LACK OF FINANCE LARGE ENTERPRISES LAW LOC MANAGEMENT MANUFACTURING ENTERPRISE MARKET MARKET DEVELOPMENT MARKET FAILURES MARKET INFORMATION MARKETS MICRO ENTERPRISES MICRO ENTREPRENEURS MICRO-ENTERPRISES ORGANIZATIONS OUTCOMES PAYMENTS PEOPLE POLICIES PRODUCTION PRODUCTIVITY PROPERTY PROPERTY RIGHTS RED TAPE REGULATION RISK RISKS SEE SMALL ENTERPRISES SMALL FIRMS SME SOURCES OF FINANCE SUPPLY SUPPLY OF CREDIT TAXATION TRAINING VALUE WAGES WORKING CAPITAL Using data on more than 56,000 enterprises in 90 countries, this paper finds that objective conditions in the business environment vary substantially across firms of different sizes and that there are important non-linearities in their impact on employment growth. The paper focuses on four areas: access to finance, business regulations, corruption, and infrastructure. The results, particularly on the impacts of finance and corruption on growth, depend on whether and how the analysis accounts for the possible endogeneity of the business environment. Controlling for endogeneity revises the finding that small firms benefit most from access to finance, particularly for sources of finance associated with investment and growth. The findings are also sensitive to how small is defined. Differentiating micro (less than 10 employees) from other small firms shows that, while small firms can be disadvantaged in such an environment, micro firms tend to be proportionally less affected by a weak business climate and, on occasion, it can help them to grow. Overall, allowing different size classifications provides insights into the impact of the business environment that are lost in more aggregate analyses. 2012-03-19T19:12:09Z 2012-03-19T19:12:09Z 2009-08-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090831130412 http://hdl.handle.net/10986/4224 English Policy Research working paper ; no. WPS 5032 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FORMAL FINANCE ACCOUNTING ADVERSE EFFECTS ALLOCATIVE EFFICIENCY BANK BANKING BENEFITS OF ACCESS BIAS BIASES BRIBE BRIBES BUSINESS DEVELOPMENT BUSINESS ENVIRONMENT BUSINESS OWNER CONSTRAINTS ON ACCESS CONTRACT LABOR CONTRACTING CORRUPTION CREDIT CREDIT MARKET CREDIT MARKETS CREDIT REPORTING CREDITOR DEVELOPMENT BANK DEVELOPMENT ECONOMICS DISPLACEMENT ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC THEORY ECONOMICS EFFECTS EFFICIENCY EMPLOYEE EMPLOYEES EMPLOYMENT EMPLOYMENT GROWTH ENTERPRISE ENTERPRISES ENTREPRENEURIAL ABILITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXCLUSION EXPANSION EXPANSIONS EXTERNAL FINANCE EXTERNAL FUNDS FINANCES FINANCIAL ACCESS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING FIRM FIRM SIZE FIRM SIZES FIXED COSTS FOREIGN FIRMS FORMAL FINANCIAL INSTITUTIONS GOVERNMENT REGULATIONS GROWTH OPPORTUNITIES HIGHER LEVELS OF ACCESS INCENTIVES INCOME INFORMAL ECONOMY INFRASTRUCTURE INNOVATION INPUT PRICE INTEREST INTERNATIONAL BANK INVESTMENT INVESTMENTS JOB CREATION JOB FLOWS JOB SECURITY LABOR LABOR FORCE LABOR MARKET LABOR REGULATIONS LACK OF FINANCE LARGE ENTERPRISES LAW LOC MANAGEMENT MANUFACTURING ENTERPRISE MARKET MARKET DEVELOPMENT MARKET FAILURES MARKET INFORMATION MARKETS MICRO ENTERPRISES MICRO ENTREPRENEURS MICRO-ENTERPRISES ORGANIZATIONS OUTCOMES PAYMENTS PEOPLE POLICIES PRODUCTION PRODUCTIVITY PROPERTY PROPERTY RIGHTS RED TAPE REGULATION RISK RISKS SEE SMALL ENTERPRISES SMALL FIRMS SME SOURCES OF FINANCE SUPPLY SUPPLY OF CREDIT TAXATION TRAINING VALUE WAGES WORKING CAPITAL |
| spellingShingle |
ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FORMAL FINANCE ACCOUNTING ADVERSE EFFECTS ALLOCATIVE EFFICIENCY BANK BANKING BENEFITS OF ACCESS BIAS BIASES BRIBE BRIBES BUSINESS DEVELOPMENT BUSINESS ENVIRONMENT BUSINESS OWNER CONSTRAINTS ON ACCESS CONTRACT LABOR CONTRACTING CORRUPTION CREDIT CREDIT MARKET CREDIT MARKETS CREDIT REPORTING CREDITOR DEVELOPMENT BANK DEVELOPMENT ECONOMICS DISPLACEMENT ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC THEORY ECONOMICS EFFECTS EFFICIENCY EMPLOYEE EMPLOYEES EMPLOYMENT EMPLOYMENT GROWTH ENTERPRISE ENTERPRISES ENTREPRENEURIAL ABILITY ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXCLUSION EXPANSION EXPANSIONS EXTERNAL FINANCE EXTERNAL FUNDS FINANCES FINANCIAL ACCESS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING FIRM FIRM SIZE FIRM SIZES FIXED COSTS FOREIGN FIRMS FORMAL FINANCIAL INSTITUTIONS GOVERNMENT REGULATIONS GROWTH OPPORTUNITIES HIGHER LEVELS OF ACCESS INCENTIVES INCOME INFORMAL ECONOMY INFRASTRUCTURE INNOVATION INPUT PRICE INTEREST INTERNATIONAL BANK INVESTMENT INVESTMENTS JOB CREATION JOB FLOWS JOB SECURITY LABOR LABOR FORCE LABOR MARKET LABOR REGULATIONS LACK OF FINANCE LARGE ENTERPRISES LAW LOC MANAGEMENT MANUFACTURING ENTERPRISE MARKET MARKET DEVELOPMENT MARKET FAILURES MARKET INFORMATION MARKETS MICRO ENTERPRISES MICRO ENTREPRENEURS MICRO-ENTERPRISES ORGANIZATIONS OUTCOMES PAYMENTS PEOPLE POLICIES PRODUCTION PRODUCTIVITY PROPERTY PROPERTY RIGHTS RED TAPE REGULATION RISK RISKS SEE SMALL ENTERPRISES SMALL FIRMS SME SOURCES OF FINANCE SUPPLY SUPPLY OF CREDIT TAXATION TRAINING VALUE WAGES WORKING CAPITAL Aterido, Reyes Hallward-Driemeier, Mary Pages, Carmen Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5032 |
| description |
Using data on more than 56,000
enterprises in 90 countries, this paper finds that objective
conditions in the business environment vary substantially
across firms of different sizes and that there are important
non-linearities in their impact on employment growth. The
paper focuses on four areas: access to finance, business
regulations, corruption, and infrastructure. The results,
particularly on the impacts of finance and corruption on
growth, depend on whether and how the analysis accounts for
the possible endogeneity of the business environment.
Controlling for endogeneity revises the finding that small
firms benefit most from access to finance, particularly for
sources of finance associated with investment and growth.
The findings are also sensitive to how small is defined.
Differentiating micro (less than 10 employees) from other
small firms shows that, while small firms can be
disadvantaged in such an environment, micro firms tend to be
proportionally less affected by a weak business climate
and, on occasion, it can help them to grow. Overall,
allowing different size classifications provides insights
into the impact of the business environment that are lost in
more aggregate analyses. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Aterido, Reyes Hallward-Driemeier, Mary Pages, Carmen |
| author_facet |
Aterido, Reyes Hallward-Driemeier, Mary Pages, Carmen |
| author_sort |
Aterido, Reyes |
| title |
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| title_short |
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| title_full |
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| title_fullStr |
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| title_full_unstemmed |
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms |
| title_sort |
big constraints to small firms’ growth? business environment and employment growth across firms |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090831130412 http://hdl.handle.net/10986/4224 |
| _version_ |
1764390484759805952 |