Making Small Firms Work: Policy Dimensions and the Scottish Context
AbstractThe basic framework of the discussion revolves around two samples of Scottish small firms for the periods 1985-88 and 1994-97. It is shown that both samples were drawn during similar (prosperous) phases of the macroeconomic cycle. Further evidence is advanced which indicates that grant and subsidy regimes have not been major determinants of survival and performance. However, the performance of small firms is shown to be better for the second sample period, compared to the first. If macroeconomic effects are neutral, and grant/subsidy regimes are insignificant, then reasons for performance differences, it is argued, must lie elsewhere. A plausible source of this is the insititutional framework. To this end, the evolution of institutional design for stimulating enterprises is documented and dated, and it is shown that the two sample periods fell within two distinct policy regimes. The first involved sectoral indicative planning, under the umbrella of the Scottish Development Agency (SDA), up until 1988. The second involving decentralised enterprise stimulation, under Scottish Enterprise (SE) from 1988 onwards. It is therefore suggested that at least part of the superior performance of small firms in the second sample period may be attributable to the new institutional framework, especially as modified by The Business Birth Rate Strategy.
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Bibliographic InfoPaper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 9811.
Date of creation: Oct 1998
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small firms; enterprise policy; business incubators; Scottish economy;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
- M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O21 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
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- Reid, Gavin C & Smith, Julia A, 2000.
" What Makes a New Business Start-Up Successful?,"
Small Business Economics, Springer,
Springer, vol. 14(3), pages 165-82, May.
- Gavin C Reid & Julia A Smith, 1996. "What Makes a New Business Start-Up Successful?," CRIEFF Discussion Papers, Centre for Research into Industry, Enterprise, Finance and the Firm 9618, Centre for Research into Industry, Enterprise, Finance and the Firm.
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