I would suggest one thing: go where the data is rich. Use the most profound data, it's ok, reveal something there. Do a good qualitative introduction. And proceed to a later stage to the more elaborate analysis you want to do, supplementary to the first. Do two things.There are very many reasons companies affect the economy, and a big number of them can be explained through behavioural economics.

You will find a great deal of working papers, even on the SSRN dealing with SMEs and large scale enterprises towards economic growth. Good luck!

"Size" is sometimes correlated with market concentration/dominance. So perhaps some ways to design a "concentration ratio".

https://www.researchgate.net/publication/301536412_Exploring_the_market_concentration_and_the_market_dominance_of_international_tourist_hotels_in_Taiwan

Another less abstract approach is to estimate "size" by degree of spatial concentration so as to establish a link with regional development at the same time.

https://www.researchgate.net/publication/288058972_The_impact_of_spatial_concentration_on_enterprise_performance

Article The impact of spatial concentration on enterprise performance

Article Exploring the market concentration and the market dominance ...

Radka, I have put online my unpublished manuscript about this issue: https://www.researchgate.net/publication/305659355_One_Model_of_Urbanization

It is a theoretical model about the influence of construction of a big plant on wage profile and occupation choice in the neighborhood that results in commuting and rural-urban migration. This model is more applicable for pre-transition period. The key variable is land as production factor and different optimal population densities in rural and urban areas. If you are OK with such density models, I have published another paper with overall analysis, including data: https://www.researchgate.net/publication/305307665_Population_Structures_in_Russia_Optimality_and_Dependence_on_Parameters_of_Global_Evolution

Research One Model of Urbanization

Article Population Structures in Russia: Optimality and Dependence o...

Thank you very much! I will read it carefully.

Radka,

If your ultimate goals is to be able to assess the overall level of those systemically stable elements of a business's activities which have enduring 'local impact'and at the same time recognise that business activities are not events occurring at a point in time but are processes of which time is an attribute of each of the effects of each of its actions, then you have immediately placed your work outside of the CGE orthodoxy of mainstream economic analysis,  Not an uncommon place to be for most development economists when they become focussed on delivering real results for real communities rather than marketable policy recommendations for PR and political rhetoric purposes of central governments.

In the former case your route should take you into the methods, tools and concepts of the evolutionary and institutional approaches within economics.  It should encompass all the behavioural, organisational and legislative institutions whose operation flows through time and create an institutional landscape characteristic of the context of each target community, and of those more remote communities whose landscapes' characteristics are themselves determinant factors in the conduct of the local operations of those firms whose ownership and control is influenced by the norms and values embedded in them and which differ from those of the local target's institutional context (as described by its local institutional landscape).

It sounds complex but, when you have visualised it, the idea is quite simple.  With that idea you have a framework inside of which you able to more easily conceive of those factors which you seek and to design the measurement methodologies which are appropriate to their nature.  Overall assessment of what will be a profile of disparate metric types might best be approached by another 'landscaping' approach. This time based upon a 'radar diagram' representation may be rather than the multi-dimensioanl 'surface analogue' by which institutional landscapes might be compared and assessed.

This part of a such a methodology might equip you in seeing how business size might be correlated with the systemic exportation through transfer payments and profit attribution of labour value to the detriment of local goals for long-term development, stability and the social cohesion which changes in income disparities tend to damage.

This approach might also provide the framework within which might be studied the effect of re-purposing and redirecting of local labour into directly creating and evolving local institutions that are conducive to the sustained development, support and maintenance of local social, physical and organisational infrastructure that are conducive to raising the efficiency and effectiveness of the local community in producing and increasing value which feed directly into the 'well-being value' experienced as a lifetime flow for each individual and their households.

The same methodology, applied to the current institutional landscape, and the firms operating within it would identify those behavioural and policy institutions, operating upon and within the local community, whose main function are, in practice, to facilitate the 'export'  to more central, and hence remote, communities value produced by local labour through their local economic activities.

Given the characterisation and detailed understanding of these two states it would create a locally relevant contextual framework of the present and future institutional landscapes and suggest the policy paths, whose evolution and implementation would lead to the evolutionary diminution and, perhaps, abandonment of those institutions of the present which are antagonist to the desired development goal.  Similarly, those policy paths would include elements which lead to the creation and enhancement of those institutions which are then being seen as promoting the local development goals.

Moral and ethical integrity, of global international force and validity, can be embedded within the target developmental institutional landscape for each locality.  This can be done by integrating into the desired institutional landscape those elements which are consistent with that set of institutional elements, that as a set are regarded as necessary and sufficient, for that institutional proto-landscape which is deemed to describe and define the conditions essential for any society or community capable of durably, resiliently and sustainably conducting its life in strict accordance with the aggregate agreed wisdom of humanity as expressed through the normative declarations of those statutory international bodies we have established since 1948 and which are now evolving out of their infantile stage into some form of co-responsibility and credibility.

The same methodology of landscape building applied to the current body of pronouncements as a whole would perhaps be very instructive and salutary for us all to consider.  It would be expected to identify those elements in what has already been said and agreed which are in fact antagonistic to the overall goals and perhaps serve various local interests and have no place in the setting of a holistically relevant, universally applicable vision of a humanitarian future by which humanity may not only survive and evolve but in which every lifetime lived can also take pleasure in doing so.

Radko,  The approach you choose to take now cannot employ a methodology that is not yet in existence.  However, the birth of that methodology can be facilitated by researchers such as yourself developing, in the course of their own work small elements and tools, and employing specific conceptual frameworks, in argument, which are consistent with its ideas.

Human behaviour has and continues to evolve.  Societal development, at the social and the economic levels, is one of continual evolution and these elements are completely intertwined and are characterised by flows, and flows within flows.  Some order is imposed upon that river flowing through time by degradable and modifiable conduits of different strength, diameter and length... they are our institutions.  The river has many tributaries.. the isolated communities in our history. But, we can now see that it will always be characterised as being a flow passing through a web of channels around many obstacles... these are our geographic and environmentally determined regions.  They lie in ever changing patterns as they present themselves and we pass them by... but always as one river.

This river of institutions and regions is itself comprised of molecules of water... each one of which is you and I, and every other person.  The river is us.  No molecule is any different from any other, and through the twists and turns as the river runs along its bed of time any molecule may end up in any channel, in any conduit and each remains a part of the whole, entitled to be in the liquid which is the water of the river.  End of metaphor...before I stretch it too far.

The point being that you cannot model the behaviour of any part of a river using a time series of statically calculated equilibria at each moment along the chosen axis of time and extrapolate and predict future states of equilibria beyond the present moment.  Using our metaphor, you know that there are conduits, ending, starting, flexing and cracking.  But you do not know which, where or when.  Just that they will.  The same goes for the obstacles up ahead, the channels opening up and those which are closing ahead of you, even dead-ends forming.  You know that they will occur and again do not know when,where and which.  

Any physicist would die laughing at you if tried to build such a model and would throw a tome or two describing basic fluid mechanics at you as he took his last gasping, hilarious breath.  You may be still alive.  But you are wrong and he was right!  At least, demonstrably more so than yourself.  Fluid mechanics may only hold a few useful tools, or even just concepts to help our thinking about ourselves.  But we can be quite sure that no living creature has or ever will be able to rationally arrive at any optimal solutions to most of life's problems in any useful way at the individual level, and so when aggregated their behaviour cannot be expected to be done in any accurately representational manner.

NP-hard problems make up most of life's decisions, we do not calculate solutions to them, nor could we for the most part.  We have evolved, and continue to evolve, other means to handle life's complexity.  Much of that methodology is now institutionalised in our newly acquired technologies and tools.

For more discussion of this I refer you back to what I mentioned many words earlier.   A seminal textbook, bringing together foundational and coherent argument, more suited to handling and studying the realities of life, its societies and its economic activities, in particular, is in the making here on RG.   Prof Shiowaza being one.  One might also delve into http://afee.net/

I expect I haven't been much help to you in producing you next paper, but it can sometimes be useful to take you eyes off the ground at your feet and gaze for a while at the horizon....  if only to check that your path is still set towards the sun and not away from it.  :-))

Robin

Dear Robin,

thank you so much for your exhaustive aswer. I am just at the very beginning, trying to find out the "right" way - which maybe does not exist :-)  You have given me a lot of think about.  I will try to do my best.

Radka

Radka,  You are welcome.  The paths away from truths supportive only of sectoral self-interest to those which have universal applicability and benefit are inevitably long and tortuous and slow in their navigation.  Patience and persistence is generally advised!   Though I, and most people, find that hard.  But it is that internal tension that drives us to persevere, and to seek and exploit every opportunity.   It keeps one young if nothing else... capitulation makes one old and tired... the consequence of guilt and regret. Robin

Hola aqui en Colombia se tiene en cuenta la clasificación de las empresas por el numero de trabajadores y el valor de los activos de las empresas, se tiene clasificación de micro, pequeña, median y gran empresa, esto de acuerdo a la Ley 590. A nivel de Colombia hay mas empresas de tipo micro y/o familiar, a nivel grande empresa son pocas se diria que un 20% , medianas un 30 y casi el 50 son microempresas, espero te sirva la información

Muchas gracias por su respuesta! :-) Radka

Dear Radka your characterization is correct, qualitative is related, in such case, with formality e informality enterprise, so employment, salary and social security. Social responsability enterprise is important knowing as quality characteristic too. I hope helpe you research

Radka,   Economists would view the relationship of size and impact entirely in terms of relative productivity.  There is a bias in economic thought (both capitalist and Marxist) in favor of large companies because there is an assumption that economies of scale (decreasing costs as a function of size) operate in most types of production.  Since there are also diseconomies of scale (increasing costs with size), the proper scale is actually an empirical question that few economists have tried to answer, outside of agriculture.  In the case of farming, large farms often have higher output per worker but lower output per hectare, compared to medium- or small-scale farms.  In manufacturing, the same relationship may hold, but few studies consider output per unit of land (by value).  Because of heavy reliance on VAT and other taxes on labor, large companies economize on labor by increased capital investment.  Thus, the tax system distorts the factor mix of production (land, labor, capital), and indirectly it distorts efficient size.  In the absence of non-neutral taxation, larger companies would appear less efficient.

All of that is from the perspective of academic economics, which ignores the role of power, a major factor in decisions about scale.  If your company owns land for a long time, that ownership gives the company power.  That is because the value of land rises over time relative to the cost of labor, but the increase in land value requires no effort, no additional investment to offset depreciation.  It is simply a gift from society to the landowner.  That advantage gives the landowner the capacity to borrow at a lower rate of interest in order to expand by buying more land. This is a cumulative process over many generations. The few studies I have seen suggest that in most cities, around 5% of the population holds about 70% of the real estate in the region.  That group of owners is the de facto local government because it controls the local pathways to increased wealth.  Most local politics is about the control of strategic locations.  That is how Donald Trump (and many less well known politicians) gained their fortune--not by producing a product of value but by manipulating the instruments of political power. 

I am suggesting, in case it is not obvious, that the role of company size in a region is largely a function of  control over land or real estate.  Ownership of land provides leverage in a distinctive way.  If the power that flows from control of strategic locations in cities or regions could be eliminated, companies would have to compete entirely in terms of their productive capacity.  I predict that under those conditions, small and medium enterprises would thrive and the current giants would mostly be broken up (through market forces, not regulation) into smaller units.  Small may truly be beautiful, but we will never see that as long as real estate overshadows production as a source of power.

 Dear Clifford, thank you very much. This is very interesting point of view for me. If you have some more comments on this topics, I would be greatful.

Dear Radka,

I will be glad to help, but I think it will require some back and forth discussion.  Please email me at

ajeseditor [at] gmail [dot] com and we can discuss more precisely what information would be helpful to you.