Small Manufacturing Enterprises in Developing Countries |
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| Authors: | Little I M D |
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| Institution: | The author, a consultant to the World Bank, is at the University of Oxford. This article is based largely on the book Small Manufacturing Enterprises: A Comparative Study of India and Other Countries by I. M. D. Little, Dipak Mazumdar, and John M. Page (forthcoming). The analysis and results reported on here are predominantly the work of Mazumdar and Page, although they are not responsible for the interpretations and conclusions reached. These are the author's; and in addition to the specific research results reported here, they draw on direct observations over many years of economic policies and development in developing countries. Other major outputs based on the same research are Anderson and Khambata (1981); Anderson (1982a, 1982b); Cortes, Berry, and Ishaq (forthcoming); Ho (1980); Mazumdar (1984a, 1984b); and Page (1979, 1984). References given in the present article are mainly to Little, Mazumdar, and Page (forthcoming) and occasionally to Cortes, Berry, and Ishaq (forthcoming). These works must be consulted for original sources. |
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| Abstract: | Emphasis is often placed on the promotion of small enterprisesin developing countries, particularly as a means of improvingthe lot of unskilled workers. This focus raises questions aboutthe relationship between establishment size and the patternand efficiency of factor use, and about the nature and effectsof price differentials in factor markets. This article goessome way toward answering these questions with data from surveysof small manufacturing enterprises in India and Colombia sponsoredby the World Bank and relevant material from other countries.The article also examines India's long-standing policy, unusualamong developing countries, of providing special support andprotection for small enterprises. Analyses based on disaggregateddata found that small firms are not reliably more labor-intensivethan their larger counter-parts; nor are they consistently moretechnically efficient in their use of resources. In light ofthese findings and an analysis of factor markets, this articlediscusses the general implications of the research results forindustrial policy in developing countries. |
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