Abstract
This paper considers the link between productivity and well-being in the context of SMEs. We formulate the Business-Wellbeing-Productivity framework, which connects business size and organizational structure with well being parameter, which, in turn, is correlated with productivity. Using country-level dataset of the OECD countries, we show that prevalence of SMEs in a country’s business sector is associated with the decrease in productivity of this country through the SMEs’ negative impact on the workforce well being. Implications of this result for theory and practice are discussed.
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