UNDERSTANDING MICRO AND SMALL ENTERPRISE GROWTH

This paper discusses the factors that determine small firms’ ability to grow. The authors discuss evidence about how contextual (business environment), social, individual entrepreneur, and firm-level variables influence micro and small enterprise (MSE) growth. The paper adopts a framework based on opportunities and capabilities and discusses how firm productivity contributes to growth. The authors conclude by discussing how development practitioners can link small enterprise growth to their programs’ desired development objectives, and offer suggestions about targeting growthoriented “gazelles” versus survivalist firms.

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