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Barriers To Entrepreneurship And Sme Growth In Transition: The Case Of Kosova

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Author Info

  • BESNIK A. KRASNIQI

    ()
    (Faculty of Economics, University of Prishtina, and Riinvest Institute for Development Research Agim Ramadani St., Pa numër, Fakulteti Ekonomik, Prishtinë, 10000, Kosovë, UK)

Abstract

This study investigates the barriers to growth of small- and medium-sized enterprises (SMEs) in Kosova. It is based on a SME survey conducted by Riinvest Institute at the end of 2002 which identified critical business environment barriers perceived by entrepreneurs such as legal environment, administrative burden, external financing, tax burden and unfair competition. First, based on this SME survey, the econometric model is constructed in order to test empirically the validity of Gibrat's Law. Then, in order to identify and measure the impact of current reported business environment barriers on SME growth, the Gibrat's Law is augmented with other business environment variables. The econometric results suggest that firms' growth is negatively linked to firms' size and age, suggesting that Gibrat's Law does not hold for growing SMEs in Kosova. Also, the growth of the SMEs is reduced by the presence of the business environmental barriers such as tax burden, unfair competition and inadequate financing. Econometric results raise important issues and policy implications for the development of the SME sector in Kosova.

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Bibliographic Info

Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Journal of Developmental Entrepreneurship.

Volume (Year): 12 (2007)
Issue (Month): 01 ()
Pages: 71-94

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Handle: RePEc:wsi:jdexxx:v:12:y:2007:i:01:p:71-94

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Related research

Keywords: Gibrat's Law; size; age; business environment; growth; SMEs; Kosova;

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Cited by:
  1. Mario Holzner & Florin Peci, 2012. "The impact of customs procedures on business performance: evidence from Kosovo," wiiw Balkan Observatory Working Papers 97, The Vienna Institute for International Economic Studies, wiiw.
  2. Vasily Astrov & Mario Holzner & Florin Peci & Sandor Richter, 2012. "Monthly Report No. 1/2012," wiiw Monthly Reports 2012-01, The Vienna Institute for International Economic Studies, wiiw.
  3. Mario Holzner & Florin Peci, 2011. "The Impact of Customs Procedures on Business Performance: Evidence from Kosovo," wiiw Working Papers 76, The Vienna Institute for International Economic Studies, wiiw.

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