Small and Medium Enterprises Across the Globe |
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Authors: | Meghana Ayyagari Thorsten Beck Asli Demirguc-Kunt |
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Institution: | (1) Department of International Business, George Washington University, Funger Hall Suite 401, 2201 G Street NW, Washington, DC, USA;(2) Development Research Group, World Bank, 1818 H Street NW, Washington, DC, USA |
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Abstract: | This paper analyzes the relationship between the relative size of the small and medium enterprise (SME) Sector and the business
environment in 76 countries. The paper first describes a new and unique cross-country database that presents consistent and
comparable information on the contribution of the SME sector to total employment in manufacturing and GDP across different
countries. We then relate the importance of SMEs and the informal economy to indicators of different dimensions of the business
environment. We find that several dimensions of the business environment, such as lower costs of entry and better credit information
sharing are associated with a larger size of the SME sector, while higher exit costs are associated with a larger informal
economy.
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Keywords: | Small and Medium Enterprises |
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