Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

LITERATURE REVIEW 
There is enough evidence to show that small businesses are an important source of economic development (Thurik 
& Wennekers, 2001). Furthermore, understanding of small business activity also suggests that they are an important 
link to entrepreneurial activity, innovation, job creation and influenced by industry dynamics, and (Acs, 1992; 
Audretsch, 1995); provide progress in the number of firms and their diversity (Cohen & Klepper, 1992); and provide 
a shift from a managed to an ownership economy (Audretsch & Thurik, 2001). Many other consequences of small 
businesses have been theorized (Schmitz, 1989) and few of these empirically observed by researchers: lower 
orientation towards exports; higher demand for capital, consultancy, and related services; and increased variety of 
supply of products and services (Acs, 1992). Studies also have shown that there is a global shift of industry 
structures tending towards an increased role of small businesses (Carree, van Stel, Thurik & Wennekers, 2001). 
However, this shift is heterogeneous and highly dependent on country-specific factors. In general, researchers 

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