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Working Papers | 2021 In the eye of the beholder? Why we need to differentiate between SMEs and Mittelstand

A common fallacy is that SMEs is the translation for Mittelstand companies. Until today, there is no common, widely accepted and consistently applied understanding of what constitutes the Mittelstand. Most empirical research on Mittelstand companies has however relied on data for small and medium-sized enterprises (SME), taking measurable proxies (such as the total number of employees and/or annual sales) as constituent features of Mittelstand companies. The paper contributes to the entrepreneurship literature by challenging this false equation of Mittelstand and SMEs. We investigate different approaches to analyze Mittelstand companies by focusing on three criteria: firm size, ownership structures and a perception of belonging. Our empirical analyses along these three dimensions support the argument that equating Mittelstand with SMEs generally causes problems, as these approaches are not congruent. Setting, however, the identity of ownership and management at the core of the Mittelstand opens the way for more comprehensive analytical approaches.

Pahnke, A.; Welter, F.; Audretsch, D. B. (2021): Im Auge des Betrachters? Warum wir zwischen KMU und Mittelstand unterscheiden müssen, in: IfM Bonn: Working Paper 04/21, Bonn.

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André Pahnke
Tel. +49 228 7299721
pahnke(at)ifm-bonn.org

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Prof. Dr. Dr. h.c. Friederike Welter
Tel. +49 228 729970
praesidentin(at)ifm-bonn.org

Profile of Prof. Dr. Dr. h.c. Friederike Welter