abd_World Bank

abd_World Bank - Small and Medium Enterprises across the...

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Small and Medium Enterprises across the Globe: A New Database Meghana Ayyagari, Thorsten Beck and Asli Demirgüç-Kunt First Draft: August 2002 Revised: August 2003 Abstract: This paper describes a new cross-country database on the importance of Small and Medium Enterprises (SME). This database is unique in that it presents consistent and comparable information on the contribution of the SME sector to total employment and GDP across different countries. The dataset improves upon existing publicly available datasets on several grounds. First, it extends coverage to a broader set of developing and industrial economies. Second, it provides information on the contribution of the SME sector using a uniform definition of small and medium enterprises across different countries, allowing for consistent cross-country comparisons. Third, while we follow the traditional definition of SME sector as being part of the formal sector, the new database also includes size of the SME sector relative to the informal sector. This paper describes the sources and the construction of the different indicators, presents descriptive statistics, and explores correlations with other socio-economic variables. Keywords: Small and Medium Enterprises JEL Classification: L11, L25, O17 Ayyagari: Robert H. Smith School of Business at the University of Maryland; Beck and Demirgüç-Kunt: World Bank. We would like to thank Nick Stern and Gerard Caprio for encouragement and helpful discussions, Patrick Honohan for useful comments and suggestions, Agnes Yaptenco for assistance with the manuscript and Leora Klapper and Victor Sulla for help in identifying data sources. This paper’s findings, interpretations, and conclusions are entirely those of the authors and do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.
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2 I. Introduction The recent World Bank Review on Small Business Activities 1 establishes the commitment of the World Bank Group to the development of the small and medium enterprise (SME) sector as a core element in its strategy to foster economic growth, employment and poverty alleviation. This year alone, the World Bank Group has approved roughly $2.8 billion in support of micro, small and medium enterprises. There is also a growing recognition of the role that SMEs play in sustained global and regional economic recovery 2 . However, there is little systematic research in this area backing the various policies in support of SMEs, primarily because of the lack of data. Hallberg (2001) actually suggests that scale-based enterprise promotion is driven by social and political considerations rather than by economic reasoning. This paper introduces a new database that, for the first time, allows researchers to examine the justification for promoting SME development. This database provides comprehensive statistics on the contribution of the SME sector to total employment and GDP across a broad spectrum of countries. The database thus allows for a comparison on how the economic importance of the SME sector varies across countries. It enables
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abd_World Bank - Small and Medium Enterprises across the...

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