Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises

The conventional wisdom on firm dynamics, productivity growth, and job creation in developing countries is based on data that, by design, excludes a vast number of micro- and small enterprises, many of which are informal. Some may not view this exclusion as an issue, on the grounds that the omitted...

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Main Authors:	Li, Yue, Rama, Martín
Format:	Journal Article
Language:	en_US
Published:	Oxford University Press on behalf of the World Bank 2016
Subjects:	aggregate productivity aggregate productivity growth employment share firm dynamics firm productivity firm size household surveys informal sector job creation labor force private sector productivity gains workers
Online Access:	http://hdl.handle.net/10986/24807

id	okr-10986-24807
recordtype	oai_dc
spelling	okr-10986-248072021-04-23T14:04:27Z Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises Li, Yue Rama, Martín aggregate productivity aggregate productivity growth employment share firm dynamics firm productivity firm size household surveys informal sector job creation labor force private sector productivity gains workers The conventional wisdom on firm dynamics, productivity growth, and job creation in developing countries is based on data that, by design, excludes a vast number of micro- and small enterprises, many of which are informal. Some may not view this exclusion as an issue, on the grounds that the omitted economic units reflect survivorship rather than entrepreneurship. However, the thresholds that determine the truncation of the data are relatively arbitrary, and the firms that are typically excluded are associated with a large share of total employment. This paper assesses the ways in which the conventional wisdom on developing countries would change if micro- and small enterprises were taken into account in the analyses. The assessment shows that micro- and small enterprises account for a greater share of gross job creation and destruction than acknowledged by the conventional wisdom. It also reveals a greater dispersion of firm productivity, a weaker correlation between firm productivity and firm size, and a smaller contribution of within-firm productivity gains to aggregate productivity growth. This assessment points to new directions in the data and research efforts needed to understand the role of micro- and small enterprises and to identify policies with the potential to foster job creation and aggregate productivity growth in developing countries. 2016-08-04T19:13:15Z 2016-08-04T19:13:15Z 2015-02 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/24807 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	aggregate productivity aggregate productivity growth employment share firm dynamics firm productivity firm size household surveys informal sector job creation labor force private sector productivity gains workers
spellingShingle	aggregate productivity aggregate productivity growth employment share firm dynamics firm productivity firm size household surveys informal sector job creation labor force private sector productivity gains workers Li, Yue Rama, Martín Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
description	The conventional wisdom on firm dynamics, productivity growth, and job creation in developing countries is based on data that, by design, excludes a vast number of micro- and small enterprises, many of which are informal. Some may not view this exclusion as an issue, on the grounds that the omitted economic units reflect survivorship rather than entrepreneurship. However, the thresholds that determine the truncation of the data are relatively arbitrary, and the firms that are typically excluded are associated with a large share of total employment. This paper assesses the ways in which the conventional wisdom on developing countries would change if micro- and small enterprises were taken into account in the analyses. The assessment shows that micro- and small enterprises account for a greater share of gross job creation and destruction than acknowledged by the conventional wisdom. It also reveals a greater dispersion of firm productivity, a weaker correlation between firm productivity and firm size, and a smaller contribution of within-firm productivity gains to aggregate productivity growth. This assessment points to new directions in the data and research efforts needed to understand the role of micro- and small enterprises and to identify policies with the potential to foster job creation and aggregate productivity growth in developing countries.
format	Journal Article
author	Li, Yue Rama, Martín
author_facet	Li, Yue Rama, Martín
author_sort	Li, Yue
title	Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
title_short	Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
title_full	Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
title_fullStr	Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
title_full_unstemmed	Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises
title_sort	firm dynamics, productivity growth, and job creation in developing countries : the role of micro- and small enterprises
publisher	Oxford University Press on behalf of the World Bank
publishDate	2016
url	http://hdl.handle.net/10986/24807
_version_	1764457701253840896

Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries : The Role of Micro- and Small Enterprises

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