Journal of Economic Growth

, Volume 10, Issue 3, pp 199–229 | Cite as

SMEs, Growth, and Poverty: Cross-Country Evidence

  • Thorsten Beck
  • Asli Demirguc-Kunt
  • Ross Levine

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.


Firm size market structure economic development 

JEL classification

O1 O2 L11 L25 


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Copyright information

© Springer Science+Business Media,Inc. 2005

Authors and Affiliations

  • Thorsten Beck
    • 1
  • Asli Demirguc-Kunt
    • 1
  • Ross Levine
    • 2
  1. 1.The World BankWashingtonUSA
  2. 2.Department of EconomicsBrown UniversityThe NBER

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