The Effect of SME Productivity Increases on Large Firm Productivity in the EU.

Summary: We examine the impact of labour productivity growth of small and medium‐sized enterprises (SMEs) on labour productivity growth of large firms in a 19‐year panel of 26 European countries. We apply a dynamic panel data model that allows for macro‐level interdependencies in productivity betwee...

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Published in:Kyklos Vol. 72; no. 2; pp. 332 - 354
Main Authors: Stel, André, Lokshin, Boris, Vries, Nardo
Format: Article
Published: Wiley-Blackwell May2019
Subjects:
Online Access:View this record in EBSCOhost
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        atl: The Effect of SME Productivity Increases on Large Firm Productivity in the EU.
      aug:
        au:
          Stel, André
          Lokshin, Boris
          Vries, Nardo
      su:
        Small business
        International business enterprises
        Industrial productivity
        Economic development
        Job creation
      sug:
        subj:
          Small business
          International business enterprises
          Industrial productivity
          Economic development
          Job creation
      ab: Summary: We examine the impact of labour productivity growth of small and medium‐sized enterprises (SMEs) on labour productivity growth of large firms in a 19‐year panel of 26 European countries. We apply a dynamic panel data model that allows for macro‐level interdependencies in productivity between small and large firms. Our main finding concerns a sizable positive effect of labour productivity increases of SMEs on the productivity of large firms. This positive effect is especially evident for medium‐sized and small firms (rather than micro firms). Furthermore, the impact of SME productivity on large‐firm productivity is increasing with the size of the SME sector. Our analysis indicates that scale effects play a role in the transmission of productivity effects from SMEs to large firms, both in terms of the size of individual SMEs (medium‐sized and small versus micro) and in terms of the share of the SME sector in the economy.
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    language: English
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