Productivity Dynamics of Small and Medium Enterprises in Taiwan

Productivity Dynamics of Small and Medium Enterprises in Taiwan Using firm level data from Taiwan, this paper examines the link between firm size, growth and productivity. It shows that firms grow because they are more productive and not because they are larger in size. Indeed, the statistical analysis shows that while employment growth among Taiwanese firms was positively related to initial levels of total factor productivity, it was negatively related to initial size. The paper also shows that the productivity-size relationship has a virtuous cycle built in. More productive firms get larger and, in the process, obtain access to resources and information which enables them to become more productive. One implication of these results is that public policies should target productivity rather than size and should support reforms that make it possible for market mechanisms to weed out low productivity firms while facilitating the entry or growth of high productivity firms. Taiwan's ability to keep entry and exit costs low is one reason why productivity gains there have been high. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Productivity Dynamics of Small and Medium Enterprises in Taiwan

Loading next page...
 
/lp/springer_journal/productivity-dynamics-of-small-and-medium-enterprises-in-taiwan-1hiAksYvim
Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2002 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:1015125827427
Publisher site
See Article on Publisher Site

Abstract

Using firm level data from Taiwan, this paper examines the link between firm size, growth and productivity. It shows that firms grow because they are more productive and not because they are larger in size. Indeed, the statistical analysis shows that while employment growth among Taiwanese firms was positively related to initial levels of total factor productivity, it was negatively related to initial size. The paper also shows that the productivity-size relationship has a virtuous cycle built in. More productive firms get larger and, in the process, obtain access to resources and information which enables them to become more productive. One implication of these results is that public policies should target productivity rather than size and should support reforms that make it possible for market mechanisms to weed out low productivity firms while facilitating the entry or growth of high productivity firms. Taiwan's ability to keep entry and exit costs low is one reason why productivity gains there have been high.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 13, 2004

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve Freelancer

DeepDyve Pro

Price
FREE
$49/month

$360/year
Save searches from Google Scholar, PubMed
Create lists to organize your research
Export lists, citations
Access to DeepDyve database
Abstract access only
Unlimited access to over
18 million full-text articles
Print
20 pages/month
PDF Discount
20% off