Smes, Growth, and Poverty

Beck, Thorsten; Demirgüç-Kunt, Asli; Levine, Ross

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Smes, Growth, and Poverty

NBER Working Paper No. w11224

45 Pages Posted: 4 May 2005 Last revised: 3 Sep 2022

See all articles by Thorsten Beck

Thorsten Beck

City University London - The Business School; Tilburg University - European Banking Center, CentER

Ross Levine

Stanford University; National Bureau of Economic Research (NBER)

Date Written: March 2005

Abstract

This paper explores the relationship between the relative size of the Small and Medium Enterprise (SME) sector, economic growth, and poverty alleviation using a new database on the share of SME labor in the total manufacturing labor force. Using a sample of 45 countries, we find a strong, positive association between the importance of SMEs and GDP per capita growth. The data do not, however, confidently support the conclusions that SMEs exert a causal impact on growth. Furthermore, we find no evidence that SMEs alleviate poverty or decrease income inequality.

Suggested Citation: Suggested Citation

Beck, Thorsten and Demirgüç-Kunt, Asli and Levine, Ross, Smes, Growth, and Poverty (March 2005). NBER Working Paper No. w11224, Available at SSRN: https://ssrn.com/abstract=693085