"The authors test competing theories of capital structure choices using firm-level data on firm borrowings. The majority of firms in the dataset are privately owned, young, micro or small and medium enterprise (SME) firms concentrated in the service sector. In general, the financing pattern of firms is low leverage ratios and, in particular, low levels of intermediated financing and long-term financing. Average firm growth rates decreased during the five years of the sample period. Average profitability growth ratios are also negative across age and sectors and large firms have the highest negative profit growth rates. Statistical tests find a positive firm size effect on financial intermediation. Larger firms have higher leverage ratios (both short term and long term), including higher use of trade credit. There is also a negative influence of profitability on leverage ratios (more profitable firms use less external financing), which supports the "pecking order" theory that in environments with greater asymmetric information (such as weaker credit information) firms prefer to use internal or inter-firm financing. Finally, firms operating in a competitive environment have higher leverage ratios. For instance, young, small firms are the most active employment generators in the Polish economy. In particular, the authors find that although SMEs seem to be very active in creating jobs in recent years. This suggests that a new type of firm is emerging that is more market and profit-oriented. But at the same time, these firms appear to have financial constraints that impede their growth. Improvements in the business environment, such as better credit and registry information, could help promote growth in this sector. "--World Bank web site.

In this extended and novel entrepreneurial analysis of small firm inception and growth, a leading authority in the field develops a new kind of ‘micro-micro’ analysis, applying rigorous methods from economics, accounting and finance to gain a deeper understanding of micro-firms, examining performance, hierarchy, capital structure, monitoring and control, flexibility, innovation, and information systems.

This paper describes a new cross-country database on the importance of small and medium enterprises (SMEs). This database is unique in that it presents consistent and comparable information on the contribution of the SME sector to total employment and GDP across different countries. The dataset improves on existing publicly available datasets on several grounds. First, it extends coverage to a broader set of developing and industrial economies. Second, it provides information on the contribution of the SME sector using a uniform definition of SMEs across different countries, allowing for consistent cross-country comparisons. Third, while we follow the traditional definition of the SME sector as being part of the formal sector, the new database also includes the size of the SME sector relative to the informal sector. This paper describes the sources and the construction of the different indicators, presents descriptive statistics, and explores correlations with other socioeconomic variables. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study SME-related issues.

measure of the rate of innovation --research-and-development (R&D) expenditure per employee compared to new patents received per employee -- does not adequately capture a unique feature of SMEs, namely that owners and managers are often themselves innovators. For example, in Japan 52 per cent of SMEs' innovations reported in 1986 were created by employers, whereas in large firms 72 per cent of innovations were created by research technicians. Nevertheless, patchy evidence from Germany, the United Kingdom and the United States indicates that SMEs at least hold their own in terms of innovation compared to large firms. Perhaps most significantly, a recent study indicates that, while the total number of innovations is positively related to R&D expenditures, skilled labour and the degree to which large firms comprise the industry, in innovative industries innovative activity tends to emanate more from SMEs than large firms. This is probably because in industries where large firms dominate, SMEs need to be innovative to survive. There is much information to suggest that in technologies such as micro-electronics, new materials and biotechnology SMEs tend to be in the vanguard of innovation. Small and medium-sized enterprises as exporters. The contribution of SMEs to a national economy from exporting is generally small; for example, in Japan SMEs accounted for only 13 per cent of merchandise exports in 1990.

The book provides a comprehensive examination of patterns and determinants of production networks in East Asia, a key driver in the region’s global success. It provides the reader with an accessible understanding of the theoretical literature on production networks and recent developments in empirical analysis at the industry and firm-levels. The topics covered in the book include: gross trade in parts and components and gravity models, trade in value added, industry case studies, and micro data econometric studies of firm heterogeneity in production networks. The micro data econometric studies explore key aspects of the heterogeneity of firms in East Asian production networks such as technological capability, the entry of small and medium enterprises into production networks, business use of free trade agreements, and access to credit. Blending new sources of data, empirical tools and econometric methods this book is highly recommended for readers who seek to understand the workings of the complex web of production networks in East Asia.

This pocket-sized reference on key environmental data for over 200 countries includes key indicators on agriculture, forestry, biodiversity, energy, emission and pollution, and water and sanitation. The volume helps establish a sound base of information to help set priorities and measure progress toward environmental sustainability goals.