Şeker, MuratCorrea, Paulo Guilherme2012-03-192012-03-192010-05-01https://hdl.handle.net/10986/3809Many studies have shown that firm growth decreases monotonically with size and age. In this study, the authors investigate employment growth of firms in Turkey with an emphasis on small and medium size enterprises. In Turkey, small and medium size enterprises account for almost 77 percent of employment and play a crucial role in the economy. However, the analysis of firm dynamics in Turkey shows that medium-size firms (51-250 workers) are the slowest growing group in the economy. Moreover, small and medium size enterprises grow at a slower rate in Turkey than in several comparator countries in the Eastern Europe and Central Asia region. After determining this irregularity, the paper analyzes how the investment climate affects firm growth and finds that improved access to finance is the most important factor that significantly increases firm growth rates.CC BY 3.0 IGOACCESS TO EXTERNAL FINANCEACCESS TO FINANCEANNUAL GROWTHANNUAL GROWTH RATEAVERAGE GROWTHAVERAGE GROWTH RATEBANK CREDITBANKSBUSINESS ENVIRONMENTCOLLATERALCOLLATERAL REQUIREMENTSCOMMODITYCOMMODITY EXCHANGESCOMPARATOR COUNTRIESCORRUPTIONCREDIT GUARANTEECREDIT LINEDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSEARNINGSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMICSEMPLOYMENTEMPLOYMENT GROWTHEQUITIESEXCLUSIONEXPANSIONEXPLANATORY VARIABLESFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFIRM GROWTHFIRM SIZEFIRMSFIXED EFFECTSFOREIGN OWNERSHIPGOVERNMENT OWNERSHIPGOVERNMENT REGULATIONGROUP OF FIRMSGROWTH PROSPECTSGROWTH RATEGROWTH RATESHUMAN CAPITALINCREASES GROWTHINTERNAL FUNDSINTERNATIONAL BANKINVESTMENT CLIMATEJOB CREATIONLEGAL CONSTRAINTSLENDERSLICENSINGLINE OF CREDITLOANLOAN APPLICATIONSMANUFACTURING INDUSTRIESMARKET STRUCTUREMEAN GROWTHMEDIUM ENTERPRISESMEDIUM SCALE ENTERPRISESMEDIUM SIZE ENTERPRISESMONEY LENDERSNEGATIVE EFFECTOBSTACLES TO GROWTHOVERDRAFTPANEL REGRESSIONSPERFORMANCE MEASURESPOLICY PERSPECTIVEPOLICY RESEARCHPOLITICAL ECONOMYPOLITICAL INSTABILITYPOWER OUTAGEPOWER OUTAGESPRIVATE SECTOR DEVELOPMENTSMALL FIRMSSMESME SECTORSTANDARD DEVIATIONSUPPLIERSTAXTAX RATESUNIONWorld Bank10.1596/1813-9450-5323