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Determinants of receiving government support by small and medium-sized enterprises in Russia

Author

Listed:
  • Iuliia N. Naidenova

    (HSE University, Perm, Russia)

  • Petr A. Parshakov

    (HSE University, Perm, Russia)

  • Aleksey O. Smirnov

    (HSE University, Perm, Russia)

Abstract

Government support measures help companies overcome various restrictions impeding their growth and develop ment, which is of special relevance for small and medium-sized enterprises (SMEs). These measures, therefore, must reach the target companies and ensure efficient allocation of resources. The article reveals key characteristics of SMEs in Russia that increase the probability of them receiving government support. The research methodology is based on public interest theory, public choice theory and the concept of economic freedom. The research method is a two-step regression analysis, in which the binary choice model is first evaluated, and then the LASSO model is used to assess the impact of the textual content of the companies’ websites. The dataset of the study is represented by data on 2,176 Russian metallurgical enterprises for 2020–2023, of which 57% were receiving government support. The results of the first step of evaluation showed that the organization’s age and size meas ured by revenue were the key factors associated with the probability of receiving government support. At the second step, we found that the mention of certain goods or materials on the websites, the enterprise’s location and orientation towards foreign stakeholders were significantly related to the likelihood of getting state support. The study offers tools for analyzing the determi nants of government support for SMEs and highlights the importance of this analysis for more efficient allocation of government resources.

Suggested Citation

  • Iuliia N. Naidenova & Petr A. Parshakov & Aleksey O. Smirnov, 2024. "Determinants of receiving government support by small and medium-sized enterprises in Russia," Upravlenets, Ural State University of Economics, vol. 15(5), pages 22-37, November.
    • Handle: RePEc:url:upravl:v:15:y:2024:i:5:p:22-37
    DOI: 10.29141/2218-5003-2024-15-5-2
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    References listed on IDEAS

    as
    1. Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
    2. Hessami, Zohal, 2014. "Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 34(C), pages 372-389.
    3. Aminullah Assagaf & Hapzi Ali, 2017. "Determinants of Financial Performance of State-owned Enterprises with Government Subsidy as Moderator," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 330-342.
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    More about this item

    Keywords

    small and medium-sized enterprises; government support; company website; advisory support; financial support; educational support;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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