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The role of financial support in SME and economic development in Estonia

Author

Listed:
  • Jelena Hartsenko

    (The School of Economics and Business Administration, Tallinn University of Technology, Estonia)

  • Ako Sauga

    (The School of Economics and Business Administration, Tallinn University of Technology, Estonia)

Abstract

This paper provides evidence on the links between efficiency and the governmental support for small-medium sized Estonian firms. The analysis is based on the Cobb-Douglas production function using micro level data. To analyse the impact of the financial support we applied a panel data framework. The estimation results confirm our main hypothesis that financial assistance increases productivity of Estonian SMEs, thus contributing the economic development.

Suggested Citation

  • Jelena Hartsenko & Ako Sauga, 2013. "The role of financial support in SME and economic development in Estonia," Business and Economic Horizons (BEH), Prague Development Center, vol. 9(2), pages 10-22, July.
    • Handle: RePEc:pdc:jrnbeh:v:9:y:2013:i:2:p:10-22
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    References listed on IDEAS

    as
    1. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    2. Girma, Sourafel & Görg, Holger & Strobl, Eric, 2003. "Government Grants, Plant Survival and Employment Growth: A Micro-Econometric Analysis," IZA Discussion Papers 838, Institute of Labor Economics (IZA).
    3. Hartsenko, Jelena & Sauga, Ako, 2013. "The role of financial support in SME and economic development in Estonia," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 9(2), pages 1-13, July.
    4. Aminata SISSOKO, 2011. "R&D Subsidies And Firm-Level Productivity: Evidence From France," LIDAM Discussion Papers IRES 2011002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 24 Oct 2013.
    5. Shahidur R. Khandker & Gayatri B. Koolwal & Hussain A. Samad, . "Handbook on Impact Evaluation : Quantitative Methods and Practices," World Bank Publications, The World Bank, number 2693, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ondřej Dvouletý, 2017. "Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START," Sustainability, MDPI, vol. 9(12), pages 1-17, December.

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    More about this item

    Keywords

    Subsidies; productivity;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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