Factors Influencing the Success of SMEs: Evidence from German Mittelstands

Abstract

The German mittelstands are widely considered as a pillar of German economy success, especially after World War II. In order to derive some practical experience about the development of small and medium size enterprises (SMEs), this paper helps to review the underlying reasons why German mittelstands can achieve such a phenomenal economic success. This paper reviews empirical studies on the success of German mittelstands and organizes the most significant factors to present a comprehensive analysis. Especially, a micro-perspective method which is at firm-level is applied to organize and conclude applicable guidance for the development of SMEs. In short, this paper finally concludes that the factors influencing the success of German mittelstands include the social market ideology, easy access to finance, efficient human capital and strong core competency of businesses.