Are small firms really less productive?

Small and medium- sized establishments ( SMEs) account for a large proportion of industrial employment and production in almost all countries. Moreover, the recent literature emphasizes the role SMEs play in nurturing entrepreneurship and generating new products and processes. Although SMEs could be a source of new ideas and innovations, there are substantial productivity differences between small and large establishments. In this paper, we analyze three sources of productivity differentials: technical efficiency, returns to scale, and technical change. Our analysis on the creation, survival, and growth of new establishments in Turkish manufacturing industries in the period 1987 - 1997 shows that all these three factors play a very important role in determining the survival probability and growth prospects of new establishments.


CARLSSON, B; Taymaz, Erol (Springer Science and Business Media LLC, 1994-06-01)
This paper analyzes the development over the postwar period of output, employment, and the number of plants in manufacturing in the United States. It is shown that the distribution of flexible technology in the form of machine tools (NCMTs) shifted markedly toward small plants during the 1980s. It is found that the probability of adoption and the penetration rate of NCMTs are higher in large than in small plants, even though the number of NCMTs per worker is much higher in small plants. This apparent parado...
The dynamics of firms in a micro-to-macro model: The role of training, learning and innovation
Ballot, G; Taymaz, Erol (Springer Science and Business Media LLC, 1997-12-01)
We analyze the co-evolution of the performances of firms and of the economy in an evolutionary micro-to-macro model of the Swedish economy. The model emphasizes the interactions between human capital (or competences) and technological change at the firm level and their effects;on aggregate growth, taking into account the micro-macro feedbacks. The model features learning-by-doing, incremental and radical innovations, user-producer learning at the firm level, and a change in the techno-economic paradigm. We ...
To innovate or to transfer? A study on spillovers and foreign firms in Turkey
LENGER, AYKUT; Taymaz, Erol (Springer Science and Business Media LLC, 2006-04-01)
FDI has been considered by many development economists as an important channel for transfer of technology to developing countries. It is suggested that modern, advanced technologies introduced by multinational firms can diffuse to domestic firms through spillovers. In this paper, we study innovation and technology transfer activities of domestic and foreign firms in Turkish manufacturing industries, and the impact of horizontal, vertical and labor spillovers on these activities. Our analysis shows that fore...
Do labour market policies reduce the informal economy more effectively than enforcement and deterrence?
Saraçoğlu, Dürdane Şirin (Elsevier BV, 2020-05-01)
In 2006, Turkish policymakers introduced new measures to reduce informality and encourage formality, in which the primary means of combatting informality were stricter enforcement of existing labor market laws and deterrence through fines, without any appropriate adjustments in formal labour costs. In this paper we show that even without any change in enforcement and deterrence, in an economy growing with capital accumulation like in Turkey, informality gradually and naturally declines. Furthermore, we prop...
Environmental impact of customs union agreement with EU on Turkey's trade in manufacturing industry
Akbostancı Özkazanç, Elif; Tunç, Gül İpek (Informa UK Limited, 2008-01-01)
In this study, we analyse Turkey's manufacturing industry trade by estimating sectoral import and export demand equations for 1980-2000. The study aims to understand whether the trade in the manufacturing industry complies with pollution haven hypothesis, and whether the free trade environment provided by the customs union (CU) agreement altered the trade pattern of the clean and dirty industries. Results of our econometric models have shown that while CU positively affects the import demand, it does not ha...
Citation Formats
E. Taymaz, “Are small firms really less productive?,” SMALL BUSINESS ECONOMICS, pp. 429–445, 2005, Accessed: 00, 2020. [Online]. Available: