Atlantic Economic Journal

, Volume 26, Issue 2, pp 137–146 | Cite as

Small firms and economic growth in europe

  • M. A. Carree
  • A. R. Thurik
Articles

Abstract

Economic activity in manufacturing industries moved away from large firms toward small firms in many Organization for Economic Cooperation and Development countries during the last two decades. However, the speed of this industrial transformation process has varied considerably across countries. This paper investigates the consequences of lagging behind in this restructuring process in manufacturing. A sample of 14 manufacturing industries in 13 European countries has been constructed for this purpose. It is found that, on average, the employment share of large firms in 1990 has a negative effect on output growth in the subsequent four-year period. This provides support for specific policies introduced during the 1980s in European countries stimulating small enterprises.

Keywords

Economic Growth European Country Economic Activity International Economic Public Finance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© International Atlantic Economic Society 1998

Authors and Affiliations

  • M. A. Carree
    • 1
  • A. R. Thurik
    • 2
  1. 1.Erasmus University RotterdamThe Netherlands
  2. 2.EIM Small Business and ConsultancyThe Netherlands

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