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    Energy and Industry

    The Dynamic Role of Small Firms: Evidence from the U.S.
    -David B. Audretsch
    This paper provides a conceptual and empirical account of the dynamic role of small and medium enterprises (SMEs) in the U.S. economy. Evidence is provided to show that SMEs are important sources of employment growth and innovation.
    2001. 34 pages. Stock No. 37180. Full text. PDF 105 Kb
    Dynamic of Small and Medium Enterprises in a Slow-Growth Economy: The Philippines in the 1990s
    -Albert Berry and Edgard Rodriguez
    This paper reviews the experience of small and medium enterprises in the Philippines. It notes that, while Philippines economic growth picked up in the early 1990s, the share of its small and medium enterprises (SMEs) in manufacturing employment and value added stayed roughly constant. However, the overall stability masks some dynamism across firm sizes and sectors. Very small firms (with less than 10 workers) had higher-than-average rates of growth of total factor productivity during 1988-94, while larger firms (of between 50 and 200 workers) experienced a decline in productivity. Towards the end of the decade, the Philippines was affected by the regional financial crisis but far less seriously than some other Asian countries. Small firms do not seem to have been worse hit than larger firms.
    2001. 24 pages. Stock No. 37181. Full text. PDF 124 Kb
    Energy Investments and the Environment: Selected Topics
    -Corazón M. Siddayao, editor, with Lisa A. Griffin
    This collection enhances an understanding and awareness of analytical and policy tools, as well as policy strategies, required to address environmental issues with respect to energy investments. It shows how to develop new energy sources in ways that are less damaging to the environment than previous practices have been.
    1993. 270 pages. ISBN 0-8213-2398-9. SKU 12398. $22.00
    Go to http://publications.worldbank.org/ecommerce/ to order this book.
    Entry of Small and Medium Enterprises and Economic Dynamism in Japan
    -Hiroki Kawai and Shujiro Urata
    In examining the evolution of small and medium enterprises in Japan in the postwar period, this paper shows that entry rates for new firms declined sharply in the last quarter century or so, a trend observed across most sectors of the economy as well as across most firm-size categories. To explain this pattern, the paper investigates the determinants of entry in Japan. Among other factors, it finds that cost disadvantages owing to small scale and the shortage of technical resources are significant deterrents to entry. It also finds that the availability of government-directed credit deters entry, which suggests that, in their current form, such credit programs protect incumbents. Among positive factors, it finds that subcontracting opportunities promote entry, suggesting that the subcontracting system in Japan is open to newcomers and helps give them a foothold in the economy.
    2001. 15 pages. Stock No. 37182. Full text. PDF 70 Kb
    The Evolution and Structure of Industrial Clusters in Japan
    -Hideki Yamawaki
    This paper focuses on two aspects of the evolution and structure of clusters in Japan, namely, what gives rise to clusters and how small firms benefit from participating in them. The paper discusses the determinants of clustering in a review of the history of 14 industrial clusters covering a wide range of industries and locations in Japan. It notes that different factors dominate in different cases. These factors include the existence of leading large firms, the availability of a pooled labor market, and the presence of public research and testing facilities. The four most important benefits from clusters reported by small firms are specialization, ease of procurement, diffusion of technology, and public-policy support. Access to skilled workers is not reported to be a significant benefit, possibly because the dominant source of skills acquisition among Japanese workers is on-the-job training and such skills may be too firm-specific to be useful to others, even within a geographically concentrated cluster.
    2001. 26 pages. Stock No. 37183. Full text. PDF 136 Kb
    Firm and Group Dynamics in the Small and Medium Enterprise Sector in Indonesia
    -Albert Berry, Edgard Rodriguez, and Henry Sandee
    This paper discusses the role of clusters and subcontracting as factors in the evolution of small and medium firms in Indonesia during the last quarter century. It argues that a number of firms have become successful exporters of rattan furniture, wood furniture, and garments on the strength of subcontracting relationships with foreign investors and buyers as well as agglomeration economies achieved by clustering in selected locations. The paper provides examples to show that clustered enterprises are more likely to be in the exports business and to adopt product and process innovations as compared to more dispersed firms. Public policy support for fostering subcontracting links and cluster formation is also discussed.
    2001. 28 pages. Stock No. 37184. Full text. PDF 93 Kb
    Government-Business Coordination and Small Business Performance in the Machine Tools Sector in Malaysia
    -Rajah Rasiah
    This paper compares the performance of small and medium size subcontractors in the machine tools industry in two different regions of Malaysia, Penang state and Kelang Valley. While Penang state has developed a fairly successful small and medium subcontracting industry, Kelang Valley has not. The difference in performance (measured by value-added) is attributed partly to differences in the extent and quality of government-business coordination. In contrast to Kelang Valley, the relatively autonomous state government of Penang took a pro-active approach to business development and provided support to its small and medium enterprises (mainly Chinese-owned) in the form of subsidized and government-firm intermediated training, and market-information exchange.
    2001. 26 pages. Stock No. 37185. Full text PDF 128 Kb
    Industrial Clusters, Focal Firms, and Economic Dynamism: A Perspective from Italy
    -Cristina Boari
    This paper discusses the role of clusters and focal firms in the economic performance of small firms in Italy. Using the example of the packaging industry of northern Italy, it shows how clusters of small firms have emerged around a few focal or leading companies. These companies have helped the clusters grow and diversify through technological and managerial spillover effects, through the provision of purchase orders, and sometimes through financial links. The role of common local training institutes, whose graduates often start up small firms within the local cluster, is also discussed.
    2001. 21 pages. Stock No. 37186. Full text PDF 132 Kb
    Industrial Structures and the Development of Small and Medium Enterprise Linkages: Examples from East Asia
    -Saha Dhevan Meyanathan, editor
    Small and medium enterprises (SMEs) play an ever-increasing role in the industrial structures of developing countries around the world. This book analyzes the importance of SME development-in the context of inter-firm linkages-and demonstrates how recent changes in industrial structure are providing opportunities for this kind of development in four East Asian countries.
    1994. 166 pages. ISBN 0-8213-2876-X. SKU 12876. $22.00
    Go to http://publications.worldbank.org/ecommerce/ to order this book.
    Managing Restructuring in the Textile and Garment Subsector: Examples from Asia
    -Saha Dhevan Meyanathan, editor
    The global textile and garment industry is a subject of interest, change, debate, and government action. Rapid technological changes, competition from new suppliers, protection of the sector, and the industry's structural characteristics have led to many structural weaknesses. This book addresses the changing structure of the industry and the factors that influence the change, adjustments, and restructuring undertaken by industrial and developing countries.
    1994. 210 pages. ISBN 0-8213-2768-2. SKU 12768. $22.00
    Go to http://publications.worldbank.org/ecommerce/ to order this book.
    Market Reforms, Technological Capabilities, and the Performance of Small Enterprises in China
    -Yueping Wang and Yang Yao
    This paper shows that the domestic and foreign trade liberalization of the Chinese economy since the late 1970s has spurred much dynamism among small and medium firms. Such firms have grown at a rapid pace and have increased their share of value added in the Chinese economy. At the same time, they have recorded gains in total factor productivity. However, after two decades of decontrol, the potential for further growth among small and medium industries is limited unless further liberalization is undertaken and government policies pertaining to the allocation of credit, levy of taxes, and grants of research and other subsidies are applied in a more even-handed fashion.
    2001. 19 pages. Stock No. 37187. Full text 62 KB
    Productivity Dynamics of Small and Medium Enterprises in Taiwan (China)
    -Bee Yan Aw
    Using firm-level data from Taiwan, China, this paper examines the link between firm size, growth and productivity. It shows that firms grow because they are more productive and not because they are larger in size. Indeed, the statistical analysis shows that while employment growth among Taiwanese firms was positively related to initial levels of total factor productivity, it was negatively related to initial size. The paper also shows that the productivity-size relationship has a virtuous cycle built in. More productive firms get larger and, in the process, obtain access to resources and information that enables them to become more productive. One implication of these results is that public policies should target productivity rather than size and should support reforms that make it possible for market mechanisms to weed out low-productivity firms while facilitating the entry or growth of high productivity firms. Taiwan's ability to keep entry and exit costs low is one reason why productivity gains there have been high.
    2001. 20 pages. Stock No. 37188. Full text 69 KB
    Small Firm Dynamics: Evidence from Africa and Latin America
    -Carl Liedholm
    This paper investigates the determinants of survival and growth among small and very small enterprises in Africa and Latin America. Location is found to be an important factor. Firms located in urban and commercial areas are more likely to survive during a given year than those located in rural areas or those being operated out of home. Urban and commercial location is also associated with faster growth, as measured by the number of employees hired in a given year. Studies are also cited to show that human capital matters, especially when it is in the form of vocational training or prior business experience.
    2001. 21 pages. Stock No. 37189. Full text 67 KB
    Small and Medium Enterprises in Korea: Achievements, Constraints, and Policy Issues
    -Jeffrey B. Nugent and Seung-Jae Yhee
    This paper provides an overview of the evolution of the small and medium enterprise sector in Korea during the past quarter century. It shows how the industrial structure of Korea has changed dramatically over this period to feature much greater shares in employment and value added by small and medium enterprises (SMEs). It reviews the evidence on SME dynamism showing that SMEs have contributed to the enormous transformations that have taken place in the Korean economy since 1975, especially with regard to exports, foreign investment and productivity performance. It discusses the role of subcontracting as well as that of government and nongovernmental institutions in supporting SME development. Finally, it examines the link between variations in the economic importance of SMEs and aspects of growth and inequality to assess whether SMEs function as business-cycle shock absorbers and inequality-reducing mechanisms.
    2001. 39 pages. Stock No. 37190. Full text 132 KB
    Small and Medium Enterprises in Thailand: Recent Trends
    -Paitoon Wiboonchutikula
    This paper reviews the evolution of small and medium firms in Thailand in recent years. It shows that such firms did not preserve their share of total employment during the period 1987-96; indeed, their share fell from 60 percent to 52 percent over this period. Much of this decline was felt in the category of very small firms (with less than 10 workers). This aspect is explored further by looking at small firm employment shares in three subperiods of varying overall economic growth rates. The paper finds that when overall economic growth is high, the share of small firms tends to contract, possibly because many small firms become medium in size and others disband because their owners can find more remunerative employment in larger firms. In slower-growth periods, the employment share of small firms appears to rise, probably because larger firms may be taking in fewer new workers or even laying off workers. The paper also calculates productivity measures (technical efficiency and total factor productivity) and shows that different measures give different rankings by size of firm.
    2001. 18 pages. Stock No. 37191. Full text 62 KB
    Subcontracting and the Performance of Small and Medium Firms in Japan
    -Fukunari Kimura
    This paper provides an empirical analysis of the choices made by Japanese firms with respect to subcontracting status -- whether to take in work as subcontractor, outsource work to subcontractors, do both, or do neither. It shows that the probability of working as a subcontractor, a choice made by many small firms in Japan, is negatively related to size, foreign sales, and technological capability. Furthermore, profits do not appear to be higher for subcontracting firms; indeed, they are highest for the group that does not get involved in any type of subcontracting, whether as a supplier or as an outsourcer.
    2001. 16 pages. Stock No. 37192. Full text 99 KB
    Technological Progress by Small and Medium Firms in Japan
    -Shujiro Urata and Hiroki Kawai
    This paper examines various aspects of total factor productivity (TFP) across different firm sizes in Japan. It shows that larger firms have higher total factor productivity levels and growth than smaller firms. There are, however, some exceptions to this pattern especially in the electric machinery sector where small firms tend to have the edge. The paper also finds that two distinctive characteristics of small and medium firms, the practice of subcontracting and the use of external patents, are positively related to total factor productivity growth while the availability of subsidized public loans is not.
    2001. 19 pages. Stock No. 37193. Full text 61 KB
    Toward the Rural-Based Development of Commerce and Industry: Selected Experiences from East Asia
    -Yujiro Hayami, editor
    This book studies production and trade contracts explored by small, rural-based manufacturers in East Asia as a basis for rural industrialization. The investigation consists of an historical review of the early stages of industrialization in Japan, and field surveys of current developments in the region. Chapters present illustrative examples and case studies.
    1998. ISBN 0-8213-4026-3. SKU 14026. $30.00
    Go to http://publications.worldbank.org/ecommerce/ to order this book.
    Urban and Industrial Management in Developing Countries: Lessons from Japanese Experience
    -Wilfrido Cruz, Kazuhiko Takemoto, and Jeremy Warford, editors
    This book summarizes the key features of Japan's work to resolve the urban and industrial pollution problems stemming from its rapid post-war industrial expansion. Drawing upon views expressed by Japanese participants and participants from other East Asian countries in an international workshop, the book identifies the main areas in which developing countries may profit from the Japanese example.
    1998. 62 pages. ISBN 0-8213-4201-0. SKU 14201. $22.00
    Go to http://publications.worldbank.org/ecommerce/ to order this book.

     



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