Microenterprise Dynamics in Developing Countries : How Similar are They to Those in the Industrialized World? Evidence from Mexico

By Pablo Fajnzylber, William F. Maloney, G. Rojas. 2006

158 citations recorded by the source corpus.

A rich panel data set from Mexico is used to study the patterns of entry, exit, and growth of microenterprises and to compare these with the findings of the mainstream theoretical and empirical work on firm dynamics. The Mexican self-employment sector is much larger than its counterpart in the United States, which is reflected in higher unconditional rates of entry into the sector. The evidence for Mexico points to the significant presence of well-performing salaried workers among the likely entrants into self-employment, as opposed to the higher incidence of poorer wageworkers among the entrants into the U.S. self-employment sector. Despite these differences, however, the patterns of entry, survival, and growth with respect to age, education, and many other covariates are very similar in Mexico and the United States. These strong similarities suggest that mainstream models of worker decisions and firm behavior are useful guides for policymaking for the developing-country microenterprise sector. Furthermore, they suggest that, as a first approximation, the developing-country microenterprise should probably be viewed as they are in the advanced countries as offering potentially desirable job opportunities to low-productivity workers.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/666737e6a09d4a2a8cf40177f6738e1c7c83a1ea

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

Citations in the corpus

Informal Work in Latin America: Competing Perspectives and Recent Debates (2009, background): “…© 2008 Blackwell Publishing Ltd In recent years, colleagues at the World Bank have extended Maloney’s research to other parts of Latin America (Fajnzylber et al. 2006; Packard 2007; Perry et al. 2007) and confirmed his ‘seminal’ finding: self-employment serves as the ‘unregulated…”
Releasing Constraints to Growth or Pushing on a String? Policies and Performance of Mexican Micro-Firms (2009, methodology): “See also Fajnzylber et al. (2006) who study the determinants of micro-firm survival using probit models.”
Labor markets and productivity in developing countries (2008, background): “(26) which implies the current value Hamiltonian is:”
What are We Learning from Business Training and Entrepreneurship Evaluations Around the Developing World? (2012, background): “Courses that focus on larger firms include content on quality management, lean production, or Kaizen and 5S techniques3 for continuous production improvement.”
Household Enterprises in Sub-Saharan Africa : Why They Matter for Growth, Jobs, and Livelihoods (2012, background): “This is the experience from Ethiopia (Loeninng and Imru, 2009), Tanzania (Kinda and Loening, 2008), Madagascar, (Grimm 2011), and other countries outside SSA (Fajnzylber et al, 2006, Schoar, 2009).”