Small and Medium Enterpris across the Globe:
A New Databa
一加3tMeghana Ayyagari, Thorsten Beck and Asli Demirgüç-Kunt
First Draft: August 2002
Revid: August 2003
Abstract: This paper describes a new cross-country databa on the importance of Small and
Medium Enterpris (SME). This databa is unique in that it prents consistent and comparable information on the contribution of the SME ctor to total employment and GDP across different countries. The datat improves upon existing publicly available datats on veral grounds.
First, it extends coverage to a broader t of developing and industrial economies. Second, it
provides information on the contribution of the SME ctor using a uniform definition of small
and medium enterpris across different countries, allowing for consistent cross-country comparisons.
Third, while we follow the traditional definition of SME ctor as being part of the
formal ctor, the new databa also includes size of the SME ctor relative to the informal
ctor. This paper describes the sources and the construction of the different indicators, prents descriptive statistics, and explores correlations with other socio-economic variables.
Keywords: Small and Medium Enterpris
JEL Classification: L11, L25, O17
Ayyagari: Robert H. Smith School of Business at the University of Maryland; Beck and Demirgüç-Kunt: World Bank. We would like to thank Nick Stern and Gerard Caprio for encouragement and helpful discussions, Patrick Honohan for uful comments and suggestions, Agnes Yaptenco for assistance with the manuscript, and Leora Klapper and Victor Sulla for help in identifying data sources. This paper’s findings, interpretations, and conclusions are entirely tho of the authors and do not necessarily reprent the views of the World Bank, its Executive Directors, or the countries they reprent.
I. Introduction
The recent World Bank Review on Small Business Activities1 establishes the commitment of the World Bank Group to the development of the small and medium enterpri (SME) ctor as a core element in its strategy to foster economic growth, employment and poverty alleviation. This year alone, the World Bank Group has approved roughly $2.8 billion in support of micro, small and medium enterpris. There is also a growing recognition of the role that SMEs play in sustained global and regional economic recovery2. However, there is little systematic rearch in this area backing the various policies in support of SMEs, primarily becau of the lack of data. Hallberg (2001) actually suggests that scale-bad enterpri promotion is driven by social and political considerations rather than by economic reasoning.莲花怎么折
This paper introduces a new databa that, for the first time, allows rearchers to examine the justification for promoting SME development. This databa provides comprehensive statistics on the contribution of the SME ctor to total employment and GDP across a broad spectrum of countries. The databa thus allows for a comparison on how the economic importance of the SME ctor varies across countries. It enables rearchers to compare the extent of SME activity of a specific country with that of other countries in the same geographical region or countries with similar income levels. It also provides statistics on the contribution of the SME ctor to the formal economy as well as the share of the informal economy.
1 The Challenge, World Bank Review of Small Business Activities, 2001作文日记
2 IFC Country Reports on Indonesia, Thailand, Tajikistan to name a few.
This databa greatly improves upon existing data on SMEs, which have been very scarce.3 Further, construction of such a broad cross-country databa has been plagued by veral problems with comparability and consistency. First, different countries adopt different criteria - such as employment, sales or investment - for defining small and medium enterpris, and different sources of statistics on SME therefore u different criteria.4 Second, even the definition of an SME on the basis of a specific criterion is not uniform across countries. For instance, a specific country may define an SME to be an enterpri with less than 500 employees while another country may define the cut-off to be 250 employees.
This new databa prents indicators of the relative importance of the SME ctor bad both on employment and GDP and draws on a wide array of sources. It is a unique databa for the following reasons. First, it provides statistics for a uniform definition of SME applied to all countries. Second, it also has an indicator of SME activity adhering to the official country definition of SMEs. And finally, it is the first to provide a measure of the size of the SME ctor with respect to the informal ctor.
The remainder of the paper is organized as follows. Section II gives the definitions of the various variables ud in the databa. Section III elaborates on the sources ud in collecting the SME data. Section IV prents the variation of the relative importance of the SMEs and the informal ctor across countries. In Section V we prent correlations and descriptive statistics, and Section VI concludes.
3 Previous efforts include Snodgrass and Biggs (1996) and Klapper and Sulla (2002).
4 Currently the SME Department of the World Bank works with the following definitions: microenterpri-up to 10 employees, total asts of up to $10,000 and total annual sales of up to $100,000; small enterpri- up to 50 employees, total asts and total sales of up to $3 million; medium enterpri – up to 300 employees, total asts and total sales of up to $1
5 million.
II. Definitions
kcl方程In this ction, we define the various variables ud to describe the relative importance of SMEs in different countries. The term SME covers a wide range of definitions and measures, varying from co
untry to country and between the sources reporting SME statistics. Some of the commonly ud criteria are the number of employees, total net asts, sales and investment level. However, the most common definitional basis ud is employment, and here again, there is variation in defining the upper and lower size limit of an SME. Despite this variance, a large number of sources define an SME to have a cut-off range of 0-250 employees. All our sources focus on SMEs in the manufacturing ctor. SMEs are defined as formal enterpris and thus different from informal enterpris.
Our main indicator is therefore bad on employment. SME250 is the share of the SME ctor in the total official labor force when 250 employees is taken as the cutoff for the definition of an SME. For a country to come under the SME250 classification, the SME ctor cutoff could range from 200-300 employees. There are few instances of this range occurring, with data for most other countries reported for an exact cut off of 250 employees.5 We have 54 countries in the SME250 sample, 13 of which are low income countries, 24 are middle income and 17 are high income countries. In constructing the employment figures for different countries, we u multiple sources, and any available data from the 1990s. So the SME250 indicator is an average over time and sources.
We also construct another t of employment measures where we retain the official country definitio
纽约的英文n of SMEs. SMEOFF is the share of the SME ctor in total
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美在不期而遇5 The source for our data on the African Countries defines an SME to be less than 200 employees and for Japan, the cut-off ud is 300 employees.
official labor force when the official country definition of SMEs is ud, with the official country definition varying between 100 and 500 employees. Countries, which defined SMEs on a category other than employment, were dropped from our sample. For countries, which do not have an official definition of SMEs, and for countries where we do not have data according to the official cut off, the cut-off data from the most reliable source was ud as SMEOFF. The choice of source in this ca depended largely on the source ud for similar countries and was usually one of the five main sources quoted below. Conquently, we have 76 countries in the SMEOFF sample, of which 17 are low income countries, 31 are middle income and 28 are high income countries. Since only some countries have 250 employees as the official cut-off, the number of countries in the SME250 sample is a subt of the number of the countries in the official sample.6 Similar to the SME250 sample, the SMEOFF measures constructed are numbers averaged over the 1990s.
To measure the contribution of the SME ctor to the economy, we u
SME_GDP, which gives the share of the SME ctor, as defined by official sources, relative to GDP.7 As in the ca of SMEOFF, variance in the official definition of the SME ctor may drive part of the variation in this indicator. We have data for 35 countries.
To obtain data on the size of the informal ctor, we u the estimates reported by Schneider (2000, 2001). He estimates the size of the shadow economy labor force for 76
6 We also explored a sample using employees up to 150 or less as a cut-off. However, we could only collect information for 31 countries and the variation of the actual cut-offs was very high, with some countries reporting figures for cut-offs as low as 10 or 25 employees and others with cut-offs of 100 or 150 employees.
7 We also constructed a ries of the relative importance of SMEs in GDP using the 250 employee cut-off. However, we could obtain data for only six countries.
1967属什么developing, transition and OECD countries. The paper also gives estimates of the official labor force. Using this data, we obtain the size of the shadow economy as a percent of official labor force, INFORMAL, averaged over the 1990s for 34 countries in our databa. 8
To obtain estimates of the informal ctor’s contribution to GDP, we u data from Friedman, Johnson, Kaufmann and Lobaton(2000). They report two ts of estimates originally from the Schneider and Enste (1998) datat. We u an average of the two estimates for our databa. Values for missing countries in this sample are obtained from Schneider (2000) who us the currency demand and DYMIMIC approaches to estimate the size of the shadow economy. Both papers report the average size of the shadow economy in percent of official GDP, labeled as INFO_GDP in our sample. Once again, the data averaged over the 1990s is ud for our databa. We thus have data on the shadow economy for 55 countries in the sample.
III. Sources
In this ction, we briefly describe the main sources ud for compiling the new databa. The SME data were drawn from existing cross-country databas, complemented in many cas with information from country-specific sources. The major sources ud are listed in the table below and described in the following. The appendix lists the sources ud for each country in detail.
8 We also construct the size of the informal economy as a percentage of total labor force(given by informal/(informal+formal)). However, we do not u this statistic becau the employment figures for the SME ctor, SME250 and SMEOFF are both reported as a percentage of official labor force.
