Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms

Aterido, Reyes ; Hallward-Driemeier, Mary ; Pages, Carmen

关键词: ACCESS TO CAPITAL;    ACCESS TO CREDIT;    ACCESS TO EXTERNAL FINANCE;    ACCESS TO FINANCE;    ACCESS TO FORMAL FINANCE;   

DOI  :  10.1596/1813-9450-5032
RP-ID  :  WPS5032

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Using data on more than 56,000enterprises in 90 countries, this paper finds that objectiveconditions in the business environment vary substantiallyacross firms of different sizes and that there are importantnon-linearities in their impact on employment growth. Thepaper focuses on four areas: access to finance, businessregulations, corruption, and infrastructure. The results,particularly on the impacts of finance and corruption ongrowth, depend on whether and how the analysis accounts forthe possible endogeneity of the business environment.Controlling for endogeneity revises the finding that smallfirms benefit most from access to finance, particularly forsources of finance associated with investment and growth.The findings are also sensitive to howsmallis defined.Differentiating micro (less than 10 employees) from othersmall firms shows that, while small firms can bedisadvantaged in such an environment, micro firms tend to beproportionally less affected by a weak business climateand, on occasion, it can help them to grow. Overall,allowing different size classifications provides insightsinto the impact of the business environment that are lost inmore aggregate analyses.