Economic Growth as the Result of Firms’ Aggregate Performance: Evidence from the OECD Countries

In recent years cross-country differences in privatelly owned firms’ performance have been linked to divergence in economic performance at national level. In this vein, this study aims to investigate if a larger private sector enhances countries output level and economic growth, in accordance with the Washington Consensus (1989), where one of the constituting economic policy prescriptions is the privatization of state enterprises. With the underlying theoretical framework based on economic growth theories to control the model and using an unbalanced panel data we estimated a empirical model using Fixed Effects Weighted Least Squares method (WLS), where countries population is the weighting factor. We conclude that firms are important factor of economic development of the countries.