Long-term decline of small and medium size enterprise share

Mulhern, Alan and Stewart, Chris (2003) Long-term decline of small and medium size enterprise share. Small Business Economics, 21(3), pp. 215-228. ISSN (print) 0921-898X

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Abstract

There exist few studies of long-term small and medium size enterprise (SME) share in developing countries. This paper presents and examines evidence that SME share in Venezuelan manufacturing has experienced serious decline from 1961 to present times. Evidence is given of this decline in terms of key performance measures: numbers of firms, employment numbers and manufacturing value added. An absolute decline of this stratum has also occurred from 1979 onwards. Economic modelling suggests that efficiency and innovation variables are significantly correlated with this decline while a structural variable explains movement around this trend. This broadly concurs with studies in other select economies where these groups of variables have also been found to be significant. However, unlike Venezuela, these variables often explain a recent revival in these economies' SME share. In particular, we find evidence that the decline in Venezuelan SMEs' relative efficiency and innovation performance along with the prejudicial business environment cause this decline in SME share.

Item Type: Article
Uncontrolled Keywords: SME, Latin America, Venezuela, determinants, firms, SMEs
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences > School of Economics (until November 2012)
Depositing User: Chris Stewart
Date Deposited: 02 Jul 2013 12:59
Last Modified: 29 Nov 2013 12:24
URI: http://eprints.kingston.ac.uk/id/eprint/25513

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