Much of the current development literature on small and micro enterprises (SMEs) is focused on how small enterprise owners expand their businesses and which factors affect structural transformation. This dissertation approaches to this question by three chapters. First chapter examines the entry behavior of prepaid phone card wholesalers into new markets in Ulaanbaatar, Mongolia, estimates the cost function, and evaluates the impact of a cost-reducing technology for SMEs. The result shows that cost distribution determines SME entry behavior, and the introduction of a cost-reducing technology led to reduced costs for wholesalers and permitted them to expand their business and make product available in an expanded market. The wholesalers’ benefit (due to reduced travel costs) is estimated to be significantly large in terms of their monthly sales. <br/> The second chapter considers trust and trustworthiness as social capital and evaluates its impact on business outcomes. Using a unique data set of real business data merged with the data collected from lab experiments, this study shows that while trustworthiness is associated with the amount of bank loan, trust is positively linked to sales amount from real business data and trust is profitable in the lab setup. It also shows that successful entrepreneurs also invest the optimal amount of trust in the lab setup. <br/> The third chapter studies experimentally the protection of property in five economically, institutionally, and culturally distinct countries—Austria, Mexico, Mongolia, South Korea and the U.S.A. The results indicate that (1) subjects from countries with more property crimes devote more resources to protection; (2) subjects from countries with high-quality political institutions support collective protection of property through taxation more often; and (3) non-theft agreements are likelier to be kept in countries with higher trust levels; (4) successful entrepreneurs in Mongolia devoted more of their resource to production but less to theft, achieving higher earnings than students. These results underscore the relevance of socio-political factors in determining countries’ success at protecting property, a cornerstone of economic prosperity<br/>
Batsaikhan, Mongoljin,
"Essays on Small and Micro Enterprises"
(2012).
Economics Theses and Dissertations.
Brown Digital Repository. Brown University Library.
https://doi.org/10.7301/Z0XD0ZZQ
