Download file 995 KB Texto completo en español More of: Alexander  Galetovic Angel Cabrera Ricardo Sanhueza Sergio De la Cuadra

What should be done with SMBs? For years there has been heated debate about the situation and fate of small and mid-sized businesses in Chile. It is held that SMBs are in crisis, that the crisis is harmful to the country’s development and, therefore, the State should support them by development credits and programs.
The main conclusion from this work is somewhat different. It says that although it is a fact that micro, small and mid-sized businesses (SMBs) have a high failure rate in Chile, more than large companies, this pattern coincides with the dynamics of the documented birth, evolution and disappearance of enterprises in several countries, both developing and developed. In fact, many studies show that most companies start out small and disappear a few years later because they were unsuccessful. Just a few are successful and survive, and even less become large after several years. Therefore, it is noted that a large part of what we are seeing is not the consequence of the recession, but rather the convenient usual workings of the economy that reflect the process of trial and error without which the aggregate productivity of the economy does not grow and no stable jobs can be created. It is held, consequently, that policies to support troubled SMBs will only delay the disappearance of a large number of relatively less productive enterprises, will waste public resources that could be put to alternative and more urgent uses, and will hinder the growth in productivity, employment, wages and salaries and the economy.