Long-term Decline of Small and Medium Size Enterprise Share

Long-term Decline of Small and Medium Size Enterprise Share 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Long-term Decline of Small and Medium Size Enterprise Share

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1023/A:1025789325911
Publisher site
See Article on Publisher Site

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.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 11, 2004

References

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