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SMEs Growth in the Czech Republic: Some Macroeconomic Perspectives

Author

Listed:
  • Christian Nedu Osakwe

    (Faculty of Economics and Management, Tomas Bata University in Zlín, nám. T. G. Masaryka 5555, 760 01 Zlín, Czech Republic)

  • Nahanga Verter

    (Department of Regional and Business Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

  • Věra Bečvářová

    (Department of Regional and Business Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

  • Miloslava Chovancová

    (Faculty of Economics and Management, Tomas Bata University in Zlín, nám. T. G. Masaryka 5555, 760 01 Zlín, Czech Republic)

Abstract

Small and medium enterprises (SMEs) are seen as a vehicle for employment generation, wealth creation, economic growth and development in countries that have a sound investment climate. SMEs, account for approximately one-third of GDP, over 50% of the value added, 99% of the share of total registered enterprises, and represent 60% of total employment in the Czech Republic. In the light of this background, the paper explores the influence of some macroeconomic variables on SMEs growth in the Czech Republic for the period 1995-2013. In order to assess the impacts of these critical macroeconomic variables (e.g., rate of unemployment, economic growth, credit provided by the financial sector) on SMEs growth, we employed an econometric technique. Our findings suggest a concave relationship between unemployment and SMEs growth in the Czech Republic. More precisely, it signifies that beyond a turning point, unemployment is likely to slow down SMEs growth in the country. Our results further hint at a positive relationship between economic growth and SMEs growth. However, our empirical estimates showed an insignificant relationship between domestic credit provided by the financial sector and SMEs growth in the country. The government of the Czech Republic should continue to provide an enabling investment climate and support for bolstering a sustainable SMEs development within the country. Similar to the extant literature, we have also implored the Czech government to do more with regard to the provision of easier access and affordable credits/loans to SMEs. We have also called for the reduction of bureaucratic bottlenecks that might have to do with SMEs legislations in the country.

Suggested Citation

  • Christian Nedu Osakwe & Nahanga Verter & Věra Bečvářová & Miloslava Chovancová, 2015. "SMEs Growth in the Czech Republic: Some Macroeconomic Perspectives," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(6), pages 2077-2084.
    • Handle: RePEc:mup:actaun:actaun_2015063062077
    DOI: 10.11118/actaun201563062077
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    References listed on IDEAS

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