scholarly journals The Missing “Missing Middle”

2014 ◽  
Vol 28 (3) ◽  
pp. 89-108 ◽  
Author(s):  
Chang-Tai Hsieh ◽  
Benjamin A. Olken
Keyword(s):  
Developing Countries ◽  
Informal Sector ◽  
Firm Size ◽  
Small Firms ◽  
Firm Growth ◽  
Bimodal Distribution ◽  
Manufacturing Firms ◽  
Large Firms ◽  
Missing Middle

Although a large literature seeks to explain the “missing middle” of mid-sized firms in developing countries, there is surprisingly little empirical backing for existence of the missing middle. Using microdata on the full distribution of both formal and informal sector manufacturing firms in India, Indonesia, and Mexico, we document three facts. First, while there are a very large number of small firms, there is no “missing middle” in the sense of a bimodal distribution: mid-sized firms are missing, but large firms are missing too, and the fraction of firms of a given size is smoothly declining in firm size. Second, we show that the distribution of average products of capital and labor is unimodal, and that large firms, not small firms, have higher average products. This is inconsistent with many models explaining “the missing middle” in which small firms with high returns are constrained from expanding. Third, we examine regulatory and tax notches in India, Indonesia, and Mexico of the sort often thought to discourage firm growth and find no economically meaningful bunching of firms near the notch points. We show that existing beliefs about the missing middle are largely due to arbitrary transformations that were made to the data in previous studies.

Industrial Research and Firm Size, Survival, and Growth in American Manufacturing, 1921–1946: An Assessment

1983 ◽  
Vol 43 (4) ◽  
pp. 953-980 ◽  
Author(s):  
David C. Mowery
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Firm Growth ◽  
Industrial Research ◽  
Large Firms ◽  
Research Activity ◽  
Growth And Survival ◽  
Survival And Growth ◽  
The Impact ◽  
The Relationship

The literature on the development of American industrial research suggests that during the twentieth century large firms “dominated” industrial research, and reaped the majority of the benefits from such activity. This paper utilizes new data to analyze both the relationship between firm size and research employment and the impact of research activity on firm growth and survival during 1921–1946. The results suggest that large firms were no more research-intensive than were small firms during the 1921–1946 period. Research activity significantly enhanced the probability of firms' survival among the ranks of the 200 largest manufacturing firms during 1921–1946. Research employment also improved the growth performance of both large and small firms during 1933–1946.

Internationalization and performance: evidence from Chinese firms

2018 ◽  
Vol 12 (1) ◽  
pp. 19-34 ◽  
Author(s):  
Chao Zhou
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Manufacturing Firms ◽  
Research Database ◽  
Large Firms ◽  
Chinese Firms ◽  
Content Type ◽  
The Impact ◽  
Overseas Subsidiaries ◽  
A Share

Purpose This paper aims to test the internationalization–performance relationship based on data of Chinese firms and the impact of firm size on the internationalization–performance relationship. Design/methodology/approach This paper uses overseas subsidiaries as a percentage of total subsidiaries to measure the degree of internationalization. As the overseas subsidiaries and total subsidiaries data of Chinese A-share listed firms are not available in any existing databases, the author hand-collected information on subsidiaries of Chinese A-share listed manufacturing firms from their annual financial reports during 2001-2014. The basic accounting and market information is collected from the China Stock Market and Accounting Research Database. This paper finally gets 535 manufacturing firms. Findings The empirical results suggest that the internationalization–performance relationship is W-shaped in overall samples, but varies with firm size. Specifically, the internationalization–performance relationship is W-shaped in small firms and U-shaped in large firms. Research limitations/implications Future studies based on unlisted Chinese firms or other measurement of internationalization may provide further understanding of the internationalization–performance relationship. Practical implications Policymakers should help small firms prepare a long-term internationalization strategy, giving more support for small firms in the first and third phases of internationalization and helping them to reach the second and fourth phases. Policymakers should also pay more attention to limit the aggressive internationalization behavior of large firms. Originality/value This study provides new evidence for the internationalization–performance relationship by using the unique longitude sample from China and the unique measurement of internationalization. We also highlight the importance of firm characteristics in the examination of internationalization–performance relationship, which provides a potential explanation for previous mixed evidence.

Experiments and Entrepreneurship in Developing Countries

2019 ◽  
Vol 11 (1) ◽  
pp. 225-248 ◽  
Author(s):  
Simon Quinn ◽  
Christopher Woodruff
Keyword(s):  
Developing Countries ◽  
Labor Markets ◽  
Small Firms ◽  
Firm Growth ◽  
Small Enterprises ◽  
Skilled Workers ◽  
Individual Decision ◽  
Managerial Training ◽  
Growth Experiments ◽  
Insight Into

We discuss the value of experiments in illuminating constraints on the growth of firms in developing countries. Experiments have provided insight into both the value and the difficulty of alleviating capital constraints in small firms. They suggest that urban, low-skilled labor markets appear to work reasonably well for firms, although there is a suggestion that frictions in markets for skilled workers may have more effect on firms. While observational data suggest that managerial training is important, experiments have shown that the traditional methods of delivering this training to small enterprises, at least, are not effective. Finally, while most work has focused on alleviating supply constraints, recent experiments have shown that positive demand shocks can be sufficient to generate firm growth. Experiments have been particularly illuminating in uncovering patterns in individual decision making, showing how agents respond to the specific changes in circumstances or incentives generated by the experiment. They are most valuable when they complement insight driven by theory.

How do micro-firms manage coopetition? A study of the wine sector in France

2017 ◽  
Vol 36 (3) ◽  
pp. 331-355 ◽  
Author(s):  
Julien Granata ◽  
Frank Lasch ◽  
Frédéric Le Roy ◽  
Léo-Paul Dana
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Simultaneous Occurrence ◽  
Large Firms ◽  
Individual Level ◽  
Competition And Cooperation ◽  
South Eastern ◽  
Collective Structure ◽  
Wine Sector

Research on coopetition – the simultaneous occurrence of competition and cooperation among firms – is usually limited to the realm of large firms. While some research has examined the motives and outcomes of coopetition among small- and medium-sized business, little is known about how coopetition is managed among micro-firms. The French wine sector is dominated by micro-firms, among which coopetition is common. Focusing on the Pic Saint Loup area in south-eastern France, this article analyses how micro-firms manage coopetition. While we observe similarities in coopetition with respect to large firms, a distinct micro-firm coopetition mode is identified: (a) contrary to expectations, the management of coopetition is highly formalised in micro-firms; (b) as with large firms, the management of micro-firm coopetition requires a separation between competition and cooperation, but such separation occurs outside the firm – in the form of a collective structure; and (c) in contrast to large firms, small firms exhibit an increase in individual-level dimensions of coopetition with decreasing firm size. We conclude that policy should encourage coopetition among micro-firms provided that it is tailored to micro-firm specificities.

Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?

2000 ◽  
Vol 38 (1) ◽  
pp. 11-44 ◽  
Author(s):  
James R Tybout
Keyword(s):  
Developing Countries ◽  
Small Groups ◽  
Small Firms ◽  
Scale Economies ◽  
Manufacturing Firms ◽  
Monopoly Power ◽  
Firm Productivity ◽  
Firm Level ◽  
Manufacturing Sectors ◽  
Open Issues

The manufacturing sectors of developing countries have traditionally been relatively protected. They have also been subject to heavy regulation, much of which has favored large firms. Accordingly, it is often argued that in these countries: (1) markets tolerate inefficient firms, so cross-firm productivity dispersion is high; (2) small groups of entrenched oligopolists exploit monopoly power in product markets; and (3) many small firms are unable or unwilling to grow, so important scale economies go unexploited. Drawing on plant and firm level studies, I assess each of these conjectures and find none to be systematically supported. However, many open issues remain.

scholarly journals Landscape Architects as Related to the Landscape/Nursery Industry: II. Selection of the Production Nursery and Plant Availability

1992 ◽  
Vol 10 (2) ◽  
pp. 73-77
Author(s):  
M.P. Garber ◽  
K. Bondari
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Large Firms ◽  
Sources Of Information ◽  
Plant Availability ◽  
Significant Difference ◽  
Two Factors ◽  
Survey Results ◽  
Selection Of

Abstract Information concerning the role of the landscape architect in verifying plant availability and selection of the production nursery where landscape contractors obtain plants can help growers develop effective marketing plans. A survey of Georgia landscape architects indicates that about 84% of the respondents confirm availability of plant material specified. A higher percentage of large firms (about 92%) confirm availability compared to medium (85.7%) and small (79.3%) firms. The three most frequently used sources of information for landscape architects to confirm plant availability are favorite local grower, nursery catalogs, and landscape contractor likely to install plants. The top three choices are the same regardless of firm size. Survey results demonstrate that landscape architects not only confirm availability of plants but also play an important role in selecting the production nursery where landscape contractors obtain plants. Approximately 61% of all respondents indicate they determine/recommend the nursery where landscape contractors obtain plants. There is a significant difference among firm size in response to this question with large firms most active in selecting the production nursery (about 92%) followed by medium (57%) and small (50%) firms. The two factors that most influence the decision of large firms are plant quality and plant varieties. Large firms are more price conscious than medium or small firms. The results suggest that growers can enhance their sales by marketing their product directly to landscape architects.

Spatiality, Clustering, and the Agglomeration Economies of Scale

2018 ◽  
pp. 224-247
Author(s):  
Simbarashe Show Mazongonda ◽  
Innocent Chirisa
Keyword(s):  
Developing Countries ◽  
Informal Sector ◽  
Large Scale ◽  
Economies Of Scale ◽  
Agglomeration Economies ◽  
Manufacturing Firms ◽  
Small Scale ◽  
Employment Creation ◽  
Strong Ties ◽  
Knowledge Economies

This chapter is based on a study that tests the realities of agglomeration economies of scale due to clustering of small-scale manufacturing firms of the informal type in Zimbabwe. Little has been studied on how the informal sector thrives on agglomeration economies of scale in developing countries. Despite this lack of research, this chapter acknowledges the existence of strong networks among small-scale manufacturers in urban Zimbabwe. These linkages, contrary to practices within large-scale manufacturers, are cemented by strong ties of entrepreneurialism. With big manufacturers, the ties are usually worker-based and less defined along entrepreneurial lines. Using spatial statistical approach, the test revealed that tool sharing, output-input relationship, employment creation, and sharing of knowledge economies of scale are also evident in developing countries.

Innovazione e ricerca nell'industria italiana. Alcune evidenze dell'indagine MET

2009 ◽  
pp. 193-207
Author(s):  
Raffaele Brancati ◽  
Davide Ciferri ◽  
Andrea Maresca
Keyword(s):  
Financial Crisis ◽  
Firm Size ◽  
Small Firms ◽  
National Level ◽  
Manufacturing Firms ◽  
Industrial System ◽  
Italian Regions ◽  
Italian Manufacturing Firms ◽  
Detailed Picture

- This work provides results from a survey based on a very large sample (25,000 firms) of Italian manufacturing firms carried out by MET in 2008. This survey, completed straight before the deepening of the financial crisis, aims to offer a detailed picture of the Italian industrial system with its regional, dimensional and sector-based variability. We show some evidence related to innovation and R&D activities. Intense heterogeneity among Italian regions is identified (other than north/south dualism). The main contribution of the work is to provide some measures of innovation and R&D for the smallest firms. Firm size is particularly relevant in explaining the intensity of R&D and the spread of innovation. Nevertheless, there is a key role of small firms in explaining the aggregate innovation performance both at regional and national level. Strong links between Innovation, R&D and Internationalisation are confirmed. R&D activities among small firms have specific characteristics: external research is widespread with an important role played by laboratories shared with other firms.

Firm Size and the Relationship Between Wage Dispersion and Firm Performance

2010 ◽  
Author(s):  
Homero Zambrano
Keyword(s):  
Theoretical Model ◽  
Firm Performance ◽  
Firm Size ◽  
Small Firms ◽  
Wage Structure ◽  
Wage Dispersion ◽  
Large Firms ◽  
Empirical Results ◽  
Simple Theoretical Model ◽  
The Relationship

A simple theoretical model explains the divergent empirical results concerning the effect of wage dispersion on firm performance. First, causality in the relationship is clarified. Then, through the model, it is shown that firm performance is non-monotonic with respect to wage dispersion. Likewise, it is shown that large firms are more likely to benefit from a dispersed wage structure than small firms.

Lights Off, Lights On: The Effects of Electricity Shortages on Small Firms

2019 ◽  
Author(s):  
Morgan Hardy ◽  
Jamie McCasland
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Firm Size ◽  
Null Hypothesis ◽  
Small Firms ◽  
Measurable Effect ◽  
Firm Level ◽  
Differential Effects

Abstract Entrepreneurs in developing countries report that unreliable electricity imposes a serious constraint, yet little evidence exists on how blackouts impact the micro-firms that account for the majority of employment. This article estimates the effects of outages on small firms using original firm-level panel data and finds evidence of differential effects by firm size. Firms without employees experience large reductions in revenues and profits. Outages have no measurable effect on the output of firms with employees, where worker hours increase, weekly wages paid decrease, and the analysis fails to reject the null hypothesis that blackouts have no effect on (average firm-level) worker hourly wages.

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