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Why don't we see more Small- and Medium-sized Enterprises (SMEs) in Lithuania?


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  • Ruta Aidis

    (Faculty of Economics and Econometrics, University of Amsterdam)


This paper identifies the specific external barriers to SME development in Lithuania. An analysis of 332 SME owners reveals that formal barriers (taxes, frequent changes to and ambiguity of tax policies) and environmental barriers (low purchasing power, lack of funds for business investment) form the most significant barriers for SME businesses. Informal barriers (late payment to clients, corruption, government interference) were secondary in significance. By grouping together variables according to barrier types, and using regression analysis, the inter-linkages between barrier types becomes evident. Our results suggest that the effect of business barriers is intensified by corruption, lack of information and inadequate business skills.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-038/2.

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Date of creation: 22 Apr 2002
Date of revision:
Handle: RePEc:dgr:uvatin:20020038

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Keywords: SMEs; business barriers; Lithuania; transition economics; institutional theory; entrepreneurship;

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  1. Bohata, Marie & Mladek, Jan, 1999. "The development of the czech sme sector," Journal of Business Venturing, Elsevier, vol. 14(5-6), pages 461-473.
  2. Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "The Regulation of Entry," Working Paper 19462, Harvard University OpenScholar.
  3. Ken Roberts & Changcheng Zhou, 2000. "New Private Enterprises in Three Transitional Contexts: Central Europe, the Former Soviet Union and China," Post-Communist Economies, Taylor & Francis Journals, vol. 12(2), pages 187-199.
  4. Johnson, Simon & McMillan, John & Woodruff, Christopher, 1999. "Why do Firms Hide? Bribes and Unofficial Activity After Communism," CEPR Discussion Papers 2105, C.E.P.R. Discussion Papers.
  5. Francesca Pissarides & Miroslav Singer & Jan Svejnar, 2000. "Objectives and Constraints of Entrepreneurs: Evidence from Small and Medium Size Enterprises in Russia and Bulgaria," William Davidson Institute Working Papers Series 346, William Davidson Institute at the University of Michigan.
  6. Riding, Allan L. & Swift, Catherine S., 1990. "Women business owners and terms of credit: Some empirical findings of the Canadian experience," Journal of Business Venturing, Elsevier, vol. 5(5), pages 327-340, September.
  7. Gerrit de Wit & Niels Bosma & Mirjam van Praag, 2000. "Determinants of Successful Entrepreneurship," Scales Research Reports H200002, EIM Business and Policy Research.
  8. Edgar L. Feige, 2003. "Underground Activity And Institutional Change: Productive, Protective And Predatory Behavior In Transition Economies," Development and Comp Systems 0305001, EconWPA.
  9. Smallbone, David & Welter, Friederike, 2001. " The Distinctiveness of Entrepreneurship in Transition Economies," Small Business Economics, Springer, vol. 16(4), pages 249-62, June.
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Cited by:
  1. Ruta Aidis, 2003. "Officially Despised Yet Tolerated: Open-air Markets and Entrepreneurship in Post-socialist Countries," Post-Communist Economies, Taylor & Francis Journals, vol. 15(3), pages 461-473.
  2. Audra I.Mockaitis & Erika Vaiginiene & Vincent Giedraitis, 2005. "The Internationalization Efforts of Lithuanian Manufacturing Firms - Strategy of Luck?," Industrial Organization 0502001, EconWPA.
  3. Ruta Aidis, 2002. "Why less? The Gendered Aspects of Small- and Medium-sized Enterprise (SME) Ownership under Economic Transition," Tinbergen Institute Discussion Papers 02-055/2, Tinbergen Institute.


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