International Journal of Advanced Culture Technology

The International Promotion Agency of Culture Technology (국제문화기술진흥원)
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Role of Large Firms in Countries on the Road to High-income Countries and Avoiding the High-income Trap

  • Shanji Xin (Center for Economic Catch-up) ;
  • Xu Jin (Konkuk University) ;
  • Furong Jin (Incheon National University)
  • Received : 2024.03.12
  • Accepted : 2024.05.01
  • Published : 2024.06.30
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Abstract

This study analyzes and compares the roles and significance of large firms in economic growth by differentiating developmental stages. The focus is on both the role of big businesses on the road from middle- to high-income countries and the performance in their economies. By classifying the top 30 nonfinancial firms into their origin countries, we have constructed a country-level data basis covering 33 countries ranging from middle- to high-income economies for the 2001 to 2017 period. We conduct fixed effect estimation. Empirical results show that capital-intensive big businesses would be more predominant in developed economies. In terms of policy implications, the results suggest that if policymakers want to optimize the role of big businesses in economic growth, policymakers need to distinguish the income level. Policymakers also need to adjust the size distribution of firms moderately ahead of time to create the size distribution of firms needed to take the economy to the next level.

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Acknowledgement

This paper was supported by Konkuk University in 2024.

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