Size Distribution of Manufacturing Establishments in Developing Countries

What explains this strong negative correlation between income levels and share of employment in small establishments? The economics literature has typically focused on size-dependent policies as an explanation for the size-income relation, i.e., developing countries have laws which discriminate against large firms (only large firms pay taxes, or small scale reservation policies) which leads to misallocation of resources, lower income levels, and smaller establishment sizes. In my research I am exploring an alternative explanation for this size-income relation. The idea that I am proposing is that poor countries and states have high demand for low quality products, the production of which requires low fixed costs (no research and development expenditure, or no need for large investments in fixed capital).