Behavior of small businesses in the transformation industry of Brazil (2000-2010)
an evaluation of two contrasting sectors
DOI:
https://doi.org/10.52712/issn.1850-0013-632Keywords:
small business, employment in small business, structural characteristics, economic growthAbstract
This paper analyzes the evolution of the participation of small firms, in terms of number of establishments and total employment, in two sectors of Brazilian industry: foods and cosmetics. The study comprises the period between 2000 and 2010, reflecting on two different moments of the Brazilian economy: 2000-2003 (low economic growth) and 2004-2010 (economic recovery). By comparing these two sectors, we seek to find out if their distinct structural characteristics are somehow mirrored in the growth rates vis-à-vis the number of establishments and employees. The data shows that the industrial structure of the cosmetics sector is predominantly composed of small firms. Furthermore, we find that the shares of total establishments and employment (around 94% and 41%, respectively) remain relatively stable throughout this period. A different situation occurs in the food sector. In this case, the data indicates that there is a fragmented industrial structure, and that firms are more geographically dispersed. Nevertheless, the largest companies have the greatest market share and dictate the dynamism of the sector. Compared to the cosmetics sector and to the industry as a whole, small firms in the food sector, albeit relevant to the industrial structure, contribute very little to generating employment.
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