Making It Big : Why Developing Countries Need More Large Firms.

Front Cover -- Contents -- Foreword -- Acknowledgments -- Executive Summary -- 12 Empirical Highlights -- Abbreviations -- Introduction Firms do not all serve the same purpose -- Firms do not all serve the same purpose -- How large is large? -- Note -- References -- 1. Large firms make distinct contributions to development -- Firm size is associated with productivity -- Size is a proxy for a package of characteristics and strategies -- Scale is associated with different returns to workers -- Macroeconomic outcomes are influenced by large-firm activity -- Notes -- References -- 2. The "missing top" -- Lower-income countries tend to have smaller firms -- The gap is in the larger among large firms -- Is there a "missing top"? -- Notes -- References -- 3. Large-firm creation: Origins and growth paths -- What do we know about the origins of large firms? -- Cross-country information on firm creation -- Origin of large firms -- Growth paths of large firms -- Notes -- References -- 4. Supporting large-firm creation -- What types of constraints give rise to the "missing top"? -- How to foster large-firm creation? -- Technology changes large-firm creation, growth, and impact -- What are the options for low-income countries? -- Case study -- Large-firm creation in Guinea: Past, present, and future -- The role of development finance institutions -- Notes -- References -- Appendixes -- Appendix A: Methodology for large-firm premiums -- Appendix B: The OECD Orbis database -- Appendix C: Why is the large-firm wage premium higher in lower-income countries? -- Appendix D: Outliers of the firm distribution -- Appendix E: IFC client data -- Appendix F: Origin and growth path results -- Appendix G: Sample for the growth path analysis -- Appendix H: Growth paths for France -- Boxes -- Box 1.1 Comparability of data on establishments versus firms.

Box 1.2 Size and management practices in Latin America and the Caribbean -- Box 1.3 The International Income Distribution Data Set (I2D2) -- Box 1.4 Job quality and development: Is there a trade-off? -- Box 2.1 A Pareto approximation of the firm-size distribution -- Box 3.1 Ethiopian Airlines: A state-owned venture that relied on foreign know-how to grow -- Box 3.2 The Tata Group of India: A family-owned conglomerate expanding into different sectors -- Box 3.3 Secure ID, Nigeria: Entrepreneurship building on large-firm experience -- Box 3.4 Tbilvino, Georgia: The importance of managerial ability for resilience and growth -- Box 3.5 Wadi Group, Egypt: Product and market diversification as a growth strategy -- Box 3.6 Indorama Group, Indonesia: The importance of foreign expansion for growth in the chemical industry -- Box 3.7 Atasu Logistics, Kazakhstan: Moving from internal to external finance for growth -- Box 4.1 Privatization and foreign ownership do not guarantee contestable markets: The case of South Africa's steel industry -- Box 4.2 Severity and specificity analysis for constraints reported in World Bank Enterprise Surveys -- Figures -- Figure I.1 The regulatory cutoff for "large" varies by economy, by employment -- Figure I.2 Firm-size distribution and employment shares: Vietnam and Spain, 2012 -- Figure 1.1 Venn diagrams: Overlap between large and more productive firms -- Figure 1.2 Probability that a firm belongs to a particular segment -- Figure 1.3 Large-firm premiums on selected indicators of performance -- Figure 1.4 Large-firm premium differences between 100+ and 300+ firms on selected indicators -- Figure 1.5 Age distribution of firms, by size and country income group -- Figure B1.2.1 Large-firm premiums on indicators of managerial practices -- Figure B1.2.2 Average aggregate management score premium of large firms.

Figure 1.6 Large-firm premiums in indicators of outward orientation -- Figure 1.7 Large-firm premiums in investment and innovation -- Figure 1.8 Differences in the characteristics of large-firm jobs compared to small-firm jobs -- Figure 1.9 Differences in the average education and skill mix between large and smaller firms -- Figure 1.11 Large-firm wage premiums, by country income level -- Figure 1.12 Cumulative contribution of the 20 largest firms in selected countries -- Figure 1.13 Cumulative contribution of large firms to aggregate employment -- Figure 1.14 Cumulative contribution of large firms to aggregate productivity -- Figure 2.1 Average size of nonagricultural establishments and GDP per capita, by country income level -- Figure 2.2 Distribution of average firm-level employment in selected middle- and lower-income countries -- Figure 2.3 Distribution of more productive firms in selected middle- and lower-income countries -- Figure 2.4 Distribution of manufacturing firms reporting export revenue in selected ­higher- and lower-income countries -- Figure 2.5 Predicted versus actual share of employment in large firms in selected middle- and lower-income countries -- Figure 3.1 Trends in the number of large firms across the sample countries at the start of the year -- Figure 3.2 Firm-size transition: Evolution of small firms 5 and 10 years after entry -- Figure 3.3 Share of five-year-old large firms that were large at origin, by sector -- Figure 3.4 Share of large firms, by origin size and country income level -- Figure 3.5 Size distribution of entrants and surviving firms at entry and after five years -- Figure 3.6 Shares of family-owned firms by firm size and region (IFC clients) -- Figure 3.7 Experience of managers of prospective IFC client companies -- Figure 3.8 Growth paths in employment and sales.

Figure 3.9 Growth path in labor productivity -- Figure 3.10 Growth paths: Exporting and product diversification -- Figure 3.11 Growth strategies of large firms relative to smaller ones (sample of IFC prospective clients) -- Figure 3.12 Growth path in wages -- Figure 3.13 Growth path in capital stock and investment -- Figure 3.14 Growth path in leverage (ratio of total liabilities to total assets) -- Figure 3.15 Financing strategies of large firms relative to smaller ones (sample of IFC prospective clients) -- Figure 3.16 Growth path in organizational capital (proxied by employment layers) -- Figure 4.1 Levels of protection of large incumbent firms across countries at different income levels -- Figure 4.2 Opposite trends in perceptions of competition and effectiveness of government policies across income groups, 2007-17 -- Figure 4.3 Large firms face more severe constraints on operations in low-income countries -- Figure 4.5 Annual number of new firms registering in Guinea versus regional peers -- Figure A.1 Innovation: Bundled premiums for 100+ and 300+ firms -- Figure B.1 Large-firm premiums in high-income versus low- and middle-income countries -- Figure C.1 Large-firm wage premium and labor rights, by country -- Figure E.1 Sectoral composition of International Finance Corporation (IFC)-appraised firms -- Figure F.1 Number of large manufacturing and services firms in Kosovo and Moldova, 2004-15 -- Figure H.1 Growth paths for France -- Tables -- Table 2.1 Difference in means, employment outliers -- Table 3.1 Description of the sample used in the analysis -- Table 3.2 Foreign ownership at entry and the probability of becoming large -- Table C.1 Large-firm wage premium regressions -- Table D.1 Difference in means, labor productivity outliers -- Table D.2 Difference in means, sales outliers.

Table D.3 Predicted versus actual share of employment in large firms in selected higher- and lower-income countries -- Table E.1 Information collected from International Finance Corporation (IFC) appraisal documents -- Table F.1 Why do firms start large? -- Table G.1 Information availability in industrial censuses.

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