SMEs and Regional Economic Growth in Brazil

This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector.Firm size, market structure, economic growth, human capital.

The Brazilian regional development funds and economic growth: A spatial panel approach

The regional development policy in Brazil materializes mainly in the regional development funds for the north-east (FNE), the north (FNO), and the centre-west (FCO), in which more than EUR36 billion was invested between 2004 and 2010. This paper examines the economic effect of these regional development funds using for the first time a unique and recent data provided by Brazil's government. The study uses spatial panel models and different spatial scales of municipalities and micro-regions to analyse the effect of development funds on regional GDP per capita growth during 2004-10. The results suggest that development funds have positive impact on GDP per capita growth mainly at municipality level. Furthermore, the results indicate that different modalities of FCO, FNO, and FNE affect regional growth differently

SMEs and regional economic growth in Brazil

This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2010_01.htmlThis paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector

Human Capital as a Conditioning Factor to the Convergence Process Among the Brazilian States

This paper examines the convergence process among the Brazilian states using different concepts of convergence and giving special attention to the role of human capital as the conditioning factor to convergence. Different measures of human capital are used in the estimation of the convergence equations and the results show that they play a significant role in explaining the improvement of the standards of living of the Brazilian population. An interesting finding is that different levels of human capital have different impacts on the growth of per capita income depending on the level of development of the Brazilian states. Lower levels of human capital explain better the convergence process among the less developed states and higher levels of human capital are more adequate for controlling differences in the "steady-states" of the more developed Brazilian regions. The impact of the intermediate levels of human capital on growth is stronger in all samples