Only recently, an increasing importance of SME sector has been well recognized. It
is also well known that the abundant SMEs benefit the economic development in
many newly industrialized economies including Taiwan. These brought a new focus
on the discussions about the interrelationship between SMEs and economic growth.
Beyond some present empirical works based on the data of advanced economies, this
study uses the data set consisting of developed and developing countries to examine
the contribution of SME sector to economic growth. Base on data across 37 countries
over the period of 1960s to 1990s, our empirical results agree with the notion that
small business is conducive to economic prosperity. However, this study highlights
the different pattern of economic contribution of SME sector to economic growth. In
pursuit of economic growth, SMEs exploit mainly their entrepreneurship in highincome
nations, while they drive the job-creating function in the less-developed
countries. Thus, there is no common policy towards SMEs for each economy.
Before designing or adjusting the SME policy, it would be useful for a policy maker
to identify the economy in terms of economic development stage.
International Council for Small Business (ICSB) 48th World Conference: Advancing Entrepreneurship and Small Business, Conference Proceedings (in CD ROM, Belfast, Northern Ireland