Working Paper: NBER ID: w11224
Authors: Thorsten Beck; Asli Demirgüç-Kunt; Ross Levine
Abstract: 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.
Keywords: No keywords provided
JEL Codes: O1; O2; L11; L25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| size of the SME sector (L25) | GDP per capita growth (O49) |
| size of the SME sector (L25) | poverty alleviation (I32) |
| size of the SME sector (L25) | income growth of the poorest quintile (D31) |
| size of the SME sector (L25) | changes in Gini coefficient (D31) |
| size of the SME sector (L25) | percentage of population living on less than one dollar a day (I32) |
| size of the SME sector (L25) | poverty gap (I32) |
| size of the SME sector (L25) | GDP per capita growth (O49) |