Microenterprise Dynamics in Developing Countries : How Similar are They to Those in the Industrialized World? Evidence from Mexico
A rich panel data set from Mexico is used to study the patterns of entry, exit, and growth of microenterprises and to compare these with the findings of the mainstream theoretical and empirical work on firm dynamics. The Mexican self-employment sec...
| Main Authors: | , , |
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| Format: | Journal Article |
| Language: | English en_US |
| Published: |
Oxford University Press on behalf of the World Bank
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2006/09/17760670/microenterprise-dynamics-developing-countries-similar-industrialized-world-evidence-mexico http://hdl.handle.net/10986/16438 |
| Summary: | A rich panel data set from Mexico is
used to study the patterns of entry, exit, and growth of
microenterprises and to compare these with the findings of
the mainstream theoretical and empirical work on firm
dynamics. The Mexican self-employment sector is much larger
than its counterpart in the United States, which is
reflected in higher unconditional rates of entry into the
sector. The evidence for Mexico points to the significant
presence of well-performing salaried workers among the
likely entrants into self-employment, as opposed to the
higher incidence of poorer wageworkers among the entrants
into the U.S. self-employment sector. Despite these
differences, however, the patterns of entry, survival, and
growth with respect to age, education, and many other
covariates are very similar in Mexico and the United States.
These strong similarities suggest that mainstream models of
worker decisions and firm behavior are useful guides for
policymaking for the developing-country microenterprise
sector. Furthermore, they suggest that, as a first
approximation, the developing-country microenterprise should
probably be viewed as they are in the advanced countries as
offering potentially desirable job opportunities to
low-productivity workers. |
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