Firm Size and the Business Environment : Worldwide Survey Results

Firm Size and the Business Environment : Worldwide Survey Results

The development of the small, and medium enterprise sector is believed to be crucial for economic growth, and poverty alleviation. Those who seek to develop the sector, must consent with the general perception that small- and medium-scale enterprises are at a disadvantage, compared with larger firms. In theory, however, smaller firms may also have advantages over larger firms. For instance, they may be less affected by excessive regulations, because they can easily slip into informal arrangements. This paper draws on a new private sector survey covering eighty countries, and one territory to study the question whether business obstacles are related to firm size. The main finding is that there is indeed a bias against small firms. Overall, (that is, for the world sample) small firms report more problems than medium-sized firms, which in turn report more problems than large firms. In particular, smaller firms face significantly more problems than larger firms with financing, taxes and regulations, inflation, corruption and street crime. Thus these impediments should be prime targets for policies directed at leveling the playing field. Some of the most severe perceived impediments to doing business affect firms of all sizes, and consequently call for across-the-board policy improvements. In addition to the worldwide analysis, the paper presents an analysis by region, and by individual country.

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Bibliographic Details
Main Authors: Schiffer, Mirjam, Weder, Beatrice
Format: Publication biblioteca
Language:English
en_US
Published: Washington, DC: World Bank and the International Finance Corporation 2001-08
Subjects:BUSINESS DEVELOPMENT, BUSINESS ENVIRONMENT, COLLUSION, COMPANY, CORPORATE GOVERNANCE, CORPORATE GROWTH, CORPORATION, DEBT, DEVELOPMENT ASSISTANCE, ECONOMIC BENEFITS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIES OF SCALE, EMPLOYMENT, ENTERPRISE DEVELOPMENT, ENTREPRENEURS, EXCHANGE RATE, FINANCIAL ASSISTANCE, FINANCIAL SECTOR, FINANCIAL SUPPORT, FIRM SIZE, FIRMS, FIXED COSTS, FOREIGN DIRECT INVESTMENT, FOREIGN OWNERSHIP, FOREIGN-OWNED FIRMS, FREE RIDERS, INDUSTRIAL COUNTRIES, INFLATION, LIVING STANDARDS, MACROECONOMIC PROBLEMS, MEDIUM SIZE, MEDIUM-SIZED ENTERPRISES, MEDIUM-SIZED FIRMS, OWNERSHIP STRUCTURE, PRIVATE ENTERPRISES, PRIVATE SECTOR, SCALE ENTERPRISES, SMALL FIRMS, SME, SMES, SOFT BUDGET CONSTRAINTS, TECHNOLOGY TRANSFER, TELECOMMUNICATIONS, TRANSITION ECONOMIES, VENTURE CAPITAL,
Online Access:http://documents.worldbank.org/curated/en/2001/08/1620971/firm-size-business-environment-worldwide-survey-results
http://hdl.handle.net/10986/13988
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Summary:The development of the small, and medium enterprise sector is believed to be crucial for economic growth, and poverty alleviation. Those who seek to develop the sector, must consent with the general perception that small- and medium-scale enterprises are at a disadvantage, compared with larger firms. In theory, however, smaller firms may also have advantages over larger firms. For instance, they may be less affected by excessive regulations, because they can easily slip into informal arrangements. This paper draws on a new private sector survey covering eighty countries, and one territory to study the question whether business obstacles are related to firm size. The main finding is that there is indeed a bias against small firms. Overall, (that is, for the world sample) small firms report more problems than medium-sized firms, which in turn report more problems than large firms. In particular, smaller firms face significantly more problems than larger firms with financing, taxes and regulations, inflation, corruption and street crime. Thus these impediments should be prime targets for policies directed at leveling the playing field. Some of the most severe perceived impediments to doing business affect firms of all sizes, and consequently call for across-the-board policy improvements. In addition to the worldwide analysis, the paper presents an analysis by region, and by individual country.

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