The Small and Medium Size Enterprises and the Middle Class Evidence of the Republic of Armenia

Abstract

This paper analyzes the importance of small and medium enterprises (SME) development in the context of middle class enlargement in the Republic of Armenia (RA). The paper first describes the relationship between the relative size of the SME sector and the living standards by country groups classified by the income-based criterion of the World Bank. We then show that the shares of middle class and SMEs increase as countries grow richer and societies less unequal. We also found that despite some improvements in SMEs in RA for the last years its size remains still insignificant and the impediments restricted the future development of the sector are specified.