Language:
English
Pages:
1 Online-Ressource (65 pages)
Parallel Title:
Erscheint auch als Abreha, Kaleb Girma Deconstructing the Missing Middle: Informality and Growth of Firms in Sub-Saharan Africa
Keywords:
Employment and Unemployment
;
Endodgenous Informality
;
Establishment Concensus
;
Firm Size Distribution
;
Inclusion of Informal Firms
;
Informality
;
Labor and Employment Law
;
Law and Development
;
Manufacturing
;
Market Distortion
;
Microenterprises
;
Missing Middle
;
Poverty Reduction
;
Private Sector Development
;
Small and Medium Size Enterprises
Abstract:
This paper characterizes the firm size distribution by exploiting establishment-level censuses covering both formal and informal firms in Sub-Saharan Africa. The paper finds a "missing middle" in the employment-based size distribution of firms in four Sub-Saharan African countries. This "missing middle" hinges on the inclusion of informal firms, and it is not explained by state- or foreign-owned firms at the top of the size distribution, nor does it emerge from the size distribution of entrants. The paper reconciles these empirical results with a model of firm dynamics with endogenous informality and shows that calibrated values of entry barriers and productivity-dependent idiosyncratic distortions generate a "missing middle" that is consistent with its underlying drivers in the data
DOI:
10.1596/1813-9450-10233
