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Entrepreneurship Policy and SME Development during Pandemic Crisis in Russia

Author

Listed:
  • S. Zemtsov

    (The Russian Presidential Academy of National Economy and Public Administration)

  • V. Barinova

    (The Russian Presidential Academy of National Economy and Public Administration
    The Innovation Economy Department, The Gaidar Institute)

  • R. Semenova

    (The Russian Presidential Academy of National Economy and Public Administration)

  • A. Mikhailov

    (The Russian Presidential Academy of National Economy and Public Administration)

Abstract

Small and medium-sized enterprises (SMEs) suffered from government restrictions and a drop in consumer demand in 2020–2021 and therefore became one of the main targets of anti-crisis support worldwide. We aimed to identify trends and factors influencing the SMEs’ dynamics in the Russian regions during the coronacrisis, including the impact of entrepreneurship policy. We have verified with the econometric analysis that the SMEs’ number reduction was more serious in regions with a large SME sector, with a high proportion of industries potentially affected by the crisis, with stricter anti-pandemic measures. The latter factor had an impact not only on the domestic market, but also on SMEs in neighboring regions, which proves the existence of close ties between enterprises of different regions. However, there are some factors that influenced the SMEs development positively: relatively higher income level, more favourable business climate and larger consumer market. The previously undertaken efforts of the regional authorities to improve the business climate had a positive effect on the SMEs survival during the crisis. Business digitalization turned out to be an effective way to adapt (online services and sales), and state support policies could be more efficient (targeted and accessible) in digitally advanced regions. The agrarian regions due to continued demand for food got through the crisis more easily, while the border regions, focused on foreign trade relations, suffered more. In general, the business performance reduction was smaller in the regions that significantly intensified support. In a group of proactive regions (Tyumen, Belgorod, Ulyanovsk oblast, Crimea,1 etc.), where both general and specific support were increased above the national average, SMEs decrease rate was 1.6% lower. According to our calculations, during crises special attention should be paid to supporting business digitalization, improving regional business climate and increasing the accessibility of markets for SMEs (transport development, import substitution, etc.). These measures can become a significant factor in business development after the events of 2022.

Suggested Citation

  • S. Zemtsov & V. Barinova & R. Semenova & A. Mikhailov, 2022. "Entrepreneurship Policy and SME Development during Pandemic Crisis in Russia," Regional Research of Russia, Springer, vol. 12(3), pages 321-334, September.
    • Handle: RePEc:spr:rrorus:v:12:y:2022:i:3:d:10.1134_s2079970522700071
    DOI: 10.1134/S2079970522700071
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    References listed on IDEAS

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    Cited by:

    1. Zemtsov, S. & Voloshinskaya, A., 2024. "Russian regional resilience under sanctions," Journal of the New Economic Association, New Economic Association, vol. 64(3), pages 54-83.
    2. V. A. Barinova & S. P. Zemtsov, 2023. "From Direct SMEs’ Support to Entrepreneurship Policy in Russia: Why Do Regional Entrepreneurial Ecosystems Matter?," Regional Research of Russia, Springer, vol. 13(3), pages 440-457, September.
    3. Polina Popova, 2024. "COVID-19, Corporate Non-performing Loans, and Corporate Lending Dynamics: Evidence from Russian Regions," HSE Working papers WP BRP 93/FE/2024, National Research University Higher School of Economics.

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