This article analyzes Small and Medium Enterprise (SMEs) employment dynamics in Lithuania from 2004 to 2024, with particular attention to spatial patterns at the municipality level. I document employment polarization within the TDS enterprise panel: while total sample employment grew, SMEs employment share declined by approximately ten percentage points, driven primarily by contraction in medium-sized enterprises. Meanwhile, micro firm-year counts expanded rapidly while average employment per micro firm declined sharply, a pattern consistent with very small-scale activity, formalization, self-employment, or tax/legal-form sorting. Geographic analysis reveals stark regional divergences.
Keywords: small and medium-sized enterprises, employment polarization, firm size distribution, regional disparities, Lithuania
JEL codes: J21, L25, L26, R11
The views expressed are those of the author(s) and do not necessarily represent those of the Bank of Lithuania.
Lithuania, small and medium-sized enterprises, employment polarization, firm size distribution, regional disparities