THE ROLE OF MICRO, SMALL AND MEDIUM SIZE ENTERPRISES (MSMEs) IN ECONOMIC GROWTH – DOES IT MATTER? THE ROLE OF MICRO, SMALL AND MEDIUM SIZE ENTERPRISES (MSMEs) IN ECONOMIC GROWTH – DOES IT MATTER?

Abstract

This study investigates the impact of micro, small, and medium size enterprises (MSMEs) on economic growth in Jordan, using the number of employees of each size (micro, small, and medium) as a measure of the prevalence of MSMEs. The study is applied to nine economic sectors to examine if the productivity of these MSMEs contribute to Jordanian economic growth measured by the sectoral real GDP per capita growth over the period 1992 to 2015. Using pooled OLS, fixed effect, and random effect methods, the results show micro, small, and medium size enterprises have insignificant impact on the GDP per capita growth. The results are robust to using alternative measure of sectoral economic growth. The results suggest that some obstacles may impede MSMEs to have real impact on Jordanian economy.