Influence of Сountry-Specific Determinants on Performance of Small and Medium Enterprises of Europe

Аннотация

A lot of obstacles stand in the way of small and medium enterprises formation. One of the first ones is an external financing gap in the majority of Central and Eastern Europe countries. Considering the totality of problems identified by entrepreneurs one may notice that the major part of them is made up of external impact factors.
The purpose of the present study is revealing the influence of country-specific determinants on performance of small and medium enterprises in 24 European countries. The research analyzed 54,512 SME within the period of 2013 to 2017.
The practical value of the research consists in the fact that its results may be useful for: governmental agencies in optimizing the existing small and medium enterprises support programs, emergent entrepreneurs when choosing the country to start up their business and for a better understanding of their environment, management when choosing the ways of entrepreneurship geographical expansion.
The applied importance of this paper consists in defining the most significant country-specific determinants of SME performance.
The regression analysis results show that the majority of small and medium enterprises from the point of view of macroeconomic and political conditions exist “in spite of, not thanks to something”. We also identified a negative relation between the government machinery efficiency as such and its efficiency in relation to SME which means that a lot of effort is necessary for improvement in this sphere. Analysis of the difference between developed and emerging countries revealed a slight positive influence of corruption on SME’s return on assets in emerging countries. Northern Europe is considered to be the friendliest region for small and medium enterprises while Eastern Europe is the least favourable one.