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We review the literature on financial constraints and the performance of small and medium enterprises (SMEs). We consider the important role that SMEs play in the economies of Australia and the OECD. We examine the role of financial constraints in SME growth, with emphasis on business cycles and credit access. We discuss issues that SMEs face in accessing financial resources for expansion. We look at the literature that evaluates the impact of financial constraints on key outcomes: employment, productivity and wages. We review key policy debates and consider where government involvement might be appropriate.

A bias correction method for inequality measures is proposed. The coefficient of variation squared (CV) is 2 used as an example and its sampling properties, bias, and mean squared error are provided. CV is shown to be downward biased for positively skewed distributions. A bias corrected estimator is provided.

Previous empirical studies have noted the higher marginal propensity to consume food out of food stamps in the United States, compared to that out of cash income. Analyzing data from U.S. Food Stamp Program participants, we find evidence that this discrepancy may be driven primarily by the behavior of multiple-adult households. Single-adult households show no evidence of any discrepancy. Thus, our results suggest that food stamp and cash income (welfare or market) may have very different impact on the intra-household allocation process, and that this is reflected empirically in the cash-out puzzle. Copyright 2005, Oxford University Press.