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SMEs and Regional Economic Growth in Brazil

Author

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  • Túlio A. Cravo

    (Dept of Economics, Loughborough University)

  • Adrian Gourlay

    (Dept of Economics, Loughborough University)

  • Bettina Becker

    (Dept of Economics, Loughborough University)

Abstract

This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector.

Suggested Citation

  • Túlio A. Cravo & Adrian Gourlay & Bettina Becker, 2010. "SMEs and Regional Economic Growth in Brazil," Discussion Paper Series 2010_01, Department of Economics, Loughborough University, revised Jan 2010.
    • Handle: RePEc:lbo:lbowps:2010_01
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    More about this item

    Keywords

    Firm size; market structure; economic growth; human capital.;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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