La Michoacana stores are the epitome of Mexican small businesses: not only independent and family-owned, but also tatty, with a few people behind the counter, working on and off the books.
They also epitomise Mexico’s stubborn attachment to smallness in business. The OECD says Mexico has more businesses with ten workers or fewer, as a share of the total, than any other big economy in Latin America. Manuel Molano of the Mexican Competitiveness Institute, a think-tank, calls this a “Peter Pan system” in which firms prefer to stay small than to grow, mostly because of tax and regulation. “It’s easier to fly under the radar when you are microscopic,” he says.
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