The Dynamics Of The Sme Sector And The Business Environment In Romania In The European Context

Although economic theory has not fully agreed whether the growth and consolidation of the SME sector causes, or is a result of economic growth, there are consistent arguments that certain characteristics of the business environment can positively influence the entrepreneurial business sector, enhancing its contribution to economic growth, employment and innovation. In the process of economic integration, the European Union (EU) recognizes the importance of SMEs for economic development, and supports this sector through numerous policies, funds and strategies to create a friendly business environment, enabling them to perform at the highest standards. As a member of the EU since 2007, Romania has made significant efforts to adjust its policies and strategies to the single market, to create a better framework for starting and developing new businesses, facilitating companies’ access to financial and human resources, to market opportunities and internationalization. In this paper, by using a series of data from various business surveys and statistics, we attempt to identify a relation between the dynamics of the SME sector and the quality of the business environment (reducing bureaucracy and administrative burden, business freedom etc.). The findings are mixed: despite strong opinions in favour of a positive relationship, there is only a moderate correlation between the quantitative growth of the SME sector, the creation of new firms, and the business environment improvements.