Abstract:
It's been acknowledged that small businesses play important role in every economy. In developing countries, economic development that could involve small-scale business is of policy makers' interest because a great number of firms and workforce are in this sector of the economy.
The economic crisis that started in 1997 has shaken many Indonesian large firms. It is interesting to know if small firms could withstand the storm better than the large ones. Using the 1998 BPS Integrated Survey micro data it is found that the majority of small firms survived the crisis, but they have not performed as well as the theory predicts. Many of them have very low value added and still employ children below the age of 15 as paid or unpaid workers. Only a small number of firms involved in some kind of networking.
