Why Don't We See More Small- and Medium-Sized Enterprises (Smes) in Lithuania?: Institutional Impediments to SME Development

Tinbergen Institute Working Paper No. 2002-038/2

35 Pages Posted: 9 Jun 2002

See all articles by Ruta Aidis

Ruta Aidis

University College London; University of Amsterdam - Faculty of Economics and Business (FEB)

Date Written: 2002

Abstract

This paper identifies the specific external barriers to SME development in Lithuania. An analysis of 332 SME owners indicates 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.

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

JEL Classification: M13, P20, P30, P39

Suggested Citation

Aidis, Ruta, Why Don't We See More Small- and Medium-Sized Enterprises (Smes) in Lithuania?: Institutional Impediments to SME Development (2002). Tinbergen Institute Working Paper No. 2002-038/2, Available at SSRN: https://ssrn.com/abstract=314201 or http://dx.doi.org/10.2139/ssrn.314201

Ruta Aidis (Contact Author)

University College London ( email )

Gower Street
London
United Kingdom

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+ 31 20 525 4011 (Phone)
+ 31 20 525 4254 (Fax)

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