Dominant factors of SMEs failure - a case study of Serbian, Hungarian and Czech enterprises (original) (raw)

The Reasons for SME's Failure, Comparative Analysis and Research

2015

This manuscript is presenting the preliminary results of research of the factors which are influencing the failure of SMEs. The manuscript is just the starting base for the larger research that will address the analysis of the most important factors that lead to closure of SMEs in different regions of the Europe. Basic factors of interest, which can be segmented as the individual characteristics of the entrepreneur or non-individual characteristics of the SMEs, based on wide literature review, were used to define the measuring scale for assessment of the most important factors which can lead to failure of SMEs, in previous research [1]. Such defined initial questionnaire form was used, in a pilot test research, to assess the opinion of the real entrepreneurs who suffered the failure of their previous businesses in Serbia. The idea of the research is to develop adequate measuring scale, which will be used to measure the potential failure of the existing SMEs, based on the rates devel...

What do we know about small and medium enterprises’ survival in a post-global economic crisis context?

Local Economy: The Journal of the Local Economy Policy Unit

Considering the impacts of the most recent global economic crisis in 2008/2009, this paper explores how firm size, type of business activity and approach to internationalisation influence SMEs’ survival. Based on the literature in the field, we developed three hypotheses regarding determinants of Small and Medium Enterprises (SME) survival. We tested these hypotheses in a 7-year quantitative study and a survey of 344 SMEs in Poland – the seventh largest market in the European Union. Our findings reveal that, in the context of crisis, internationalisation acts as a stimulus for SMEs and influences their long-term sustainability, with businesses operating in foreign markets being more likely to survive after a global crisis. However, neither business size nor the type of business activity appears to have an impact on SMEs’ survival in a post-global economic crisis environment. Our paper extends knowledge about factors influencing a firm’s post-crisis survival and proposes a new framew...

CHALLENGES OF SMALL AND MEDIUM SIZED COMPANIES AT EARLY STAGE OF DEVELOPMENT: INSIGHTS FROM BOSNIA AND HERZEGOVINA

The purpose of this paper is to discover and understand factors that lead to small and medium-sized enterprises (SMEs) shutdown in transitional economies, such as the economy of Bosnia and Herzegovina (B&H). The paper provides some findings about main influencing factors that lead to SMEs shut down in the first years of operation from entrepreneurs' and managers' perspective and suggests certain measures that should be taken to secure their survival, development and growth. For the purpose of this paper, empirical research was conducted, using stratified sampling of 110 SMEs from Republic of Srpska (49% of B&H territory). The section on methodology explains the entry criteria for the study population and methods of data analysis. Respondents from the research sample identified the following factors as the main obstacles to successful development of their businesses: difficulties in the collection of receivables from debtors, complicated legal procedures that regulate the work and business operations of enterprises, high rates of taxes and contributions on wages, the negative impact of the global economic crisis and expensive and complicated procedures for obtaining loans from commercial banks. Respondents didn't evaluate their personal traits, level of formal and informal knowledge from business management field or lack of entrepreneurial spirit and readiness for being proactive, innovative or risk acceptance as potential causes of business failure. With its limitation, the paper contains novel information and insights about SMEs business obstacles and: Challenges of small and medium sized companies at early … 46 challenges in economy of Bosnia and Herzegovina as a solid base for more comprehensive future researches.

Factors Determining Success of Small and Medium Enterprises (Smes) in Kosovo

2020

Small and medium‐sized enterprises (SMEs) are integral part of economic and social development and regeneration, they promote economic growth and increase a country’s competitiveness and wealth, and are a key driver to innovation. They are acknowledged worldwide as the drivers of socio-economic development because of their important role in GDP growth, new job creation and entrepreneurship. Today SMEs have gained importance in the developing economies too, have become advantageous by having the capability of quick adaptation, working with less capital but more intense labor and having low cost of management and relative cheap production. Small and Medium Enterprises play an important role in the national economy and the development of Kosovo too, this is reflected in the impact they have on employment , on contributing to national income and at the level of population welfare.The aim of this study is to explore the success factors of small and medium-sized enterprises (SMEs) in Koso...

Factors Affecting the Growth and Development of SMEs: Experiences from Kosovo

Small and medium enterprises are becoming increasingly important for the creation and development of a modern, dynamic and knowledge-based economy. This is because of their capacity to promote entrepreneurship and entrepreneurial skills, and because of their ability to be flexible and adapt quickly to a changing market, and to generate new jobs. SME sector is the backbone of the economy in countries with higher income, while it is less developed in the countries with the low incomes. Organization for Economic Cooperation and Development (OECD) reports that more than 95% of enterprises in the OECD area are SMEs. These enterprises employ about 60% of private sector workers, make a major contribution in the field of innovation and support regional development and social cohesion. Also, SMEs in most low income countries give significant contribution to GDP growth and the creation of new jobs. In Kosovo SMEs represent more than 99% of the total number of enterprises and their share in GDP amounts to more than 50% (CBK, 2011). For this reason, the identification of external factors affecting the development of SMEs in Kosovo is very important, in order to take all the necessary steps to reduce or remove barriers and create new opportunities for these enterprises. This research focuses primarily on the impact of external factors, with special emphasis on access to finance for Small and Medium Enterprises (SMEs) in Kosovo. External factors such as access to finance, competition, corruption, and government policies have very important impact in the development of SMEs in Kosovo. Facilitating access to finance is essential to set up a favorable environment to develop SMEs. However, in general, SMEs in developing countries face numerous barriers to funding, although this problem is not unknown even in developed countries. Barriers that face SMEs usually relate to high administrative costs, high collateral requirements and the lack of willingness of banks to lend to SMEs. Raising the level of awareness of their role and availability of access to finance for SMEs can improve economic conditions in developing countries by promoting innovation, growth of GDP and reduce unemployment.

Internal and External Obstacles to the Development of SMEs in Bosnia and Herzegovina

Abstract This article describes the small and medium enterprise (SME) sectors in Bosnia and Herzegovina (BiH) and other Western Balkan countries, and compares their development. The authors identify the levels of evelopment achieved, remedial measures and activities for stimulating this sector. There is special emphasis on external and internal obstacles to small and medium-sized manufacturing enterprises in BiH. The authors conclude that in respect to SMEs BiH lags behind other countries in the region, where this sector has achieved dynamic development and a majority share in the employment market, exports and GDP. That said, there remains a need across the whole region to resolve obstacles in the domestic market, alongside initiating intensive activities aimed at introducing Zijad Džafić Faculty of Economics, University of Tuzla, Bosnia and Herzegovina zijad.dzafic@untz.ba Sejfudin Zahirović Faculty of Economics, University of Tuzla, Bosnia and Herzegovina sejfudin.zahirovic@untz.ba Jasmina Okičić Faculty of Economics, University of Tuzla, Bosnia and Herzegovina jasmina.okicic@untz.ba Amra Kožarić Faculty of Economics, University of Tuzla, Bosnia and Herzegovina amra.kozaric@untz.ba CroEconSur Vol. 13 No. 1 April 2011 pp. 143-171 Received: November 01, 2010 Accepted: January 11, 2011 Preliminary Communication 144 Zijad Džafić, Sejfudin Zahirović, Jasmina Okičić and Amra Kožarić Internal and External Obstacles to the Development of SMEs in Bosnia and Herzegovina Croatian Economic Survey : Vol. 13 : No. 1 : April 2011 : pp. 143-171 the SMEs to the Single European Market. For BiH, primary research has been carried out to determine the external and internal obstacles to SMEs in the country’s manufacturing sector. The key obstacles are identified, their intensity and grade determined, and they are classified into three groups. Factor analysis was used in determining six factors explaining external obstacles and two factors for internal obstacles. It has also been confirmed that other companies apart from manufacturing SMEs face broadly similar external obstacles, and that these obstacles are more in evidence when compared to the situation in other Western Balkan countries.

FIELD OF CHALLENGES: A CRITICAL ANALYSIS OF THE HUNGARIAN SME SECTOR WITHIN THE EUROPEAN ECONOMY

2016

Small and medium-sized enterprises (SMEs) are the backbone of Hungary's and the European economy. They represent 99% of all businesses in the European Union. In the past five years, they have created 85% of new jobs and provided two-thirds of the total private sector employment in the EU. As a result, the economic growth depends on the sector's development ability. Since SMEs are the most important source of employment in the European Union, several national and international programs are intended to enhance entrepreneurship and increase the growth of its turnover. Does the SME sector show a rising trend? What are the characteristics of Hungarian SMEs according to EU and world standards? What are the achievements of the SME development policy in Europe and Hungary? How to improve the national indicators?

SMEs and Entrepreneurship Development and Institutional Support in Republic of Srpska (Bosnia and Herzegovina)

Entrepreneurship in the Balkans, 2013

The economy of Bosnia and Herzegovina and the Republic of Srpska (RS) in the last decade, from 2001 to 2010, according to official statistics, has recorded a significant economic growth. Between 2001 and 2010 GDP in the RS has almost tripled, from 1,478,000 € to 4,250,000 €, respectively (Republic of Srpska Institute of Statistics 2011). This growth is due to the growth of the sector of small and medium-sized enterprises (SMEs) that, in the period between 2006 and 2008, has recorded a growth of SMEs of 8.41 %. The growth has continued in 2009. Out of 14,321 companies, only 55 or 0.38 % were large enterprises. However, in 2010, according to APIF data, 9,472 companies have submitted their required financial reports for the year 2009. Comparing this number with the data from 2009, the question is what happened with other companies? Have they ceased to do business or simply have not fulfilled their legal obligation?