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METHODOLOGY

Sample and Data Collection

A number of researchers have attempted to test the implications of economic growth theories and to determine the main sources of growth using cross–sectional data for large samples of countries (DeGregorio, 1992). However, there is a growing distaste for taking macro views of economic development since a macro view often misses the rich details which contribute to our knowledge (Poulson, 1996). Therefore, in order to get a richness of detail, data for this study was collected from a national sample of MSEs conducted by the Dominican Republic starting in March 1992 through March 1995 (the data collection is ongoing and continued today). The data used for this study is categorized into three geographic units: Santo Domingo (the capital), Other Major Cities, and the rest of the country. Location sites were determined based on those urban areas which had over 10,000 residents as of 1981.

The data was collected during 3,992 interviews with 628 registered firms on a survey form and allows the authors to track closed firms. For this study, firm closures were tracked from March of 1994 to March of 1995. The interview survey for firms which had disappeared was designed to determine why went out of business. Variables included reasons for disappearance, owner(s)’ gender, current occupation of the owner(s), sources of financing, age and size of the firm, and whether the business was conducted from the home or from another location (the survey questions, in the original Spanish are provided in Appendix One). The micro–enterprise definition of firms used here includes all non–agricultural firms with one to ten permanent employees. Permanent employees are defined as all employees, including the owner, who are dedicated full–time or part–time to the success of the firm, regardless of salary. The firms in this data set were the major contributors of household income for the firm owner.

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