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The Effects of State Development Banks on the Performance of Small and Medium Enterprises

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  • Petrović Jadranka

    (PhD candidate at the Faculty of Economics, University of Banja Luka, B&H)

Abstract

The views regarding the role and the need for state development banks have evolved in the 20th century, from considering their role as very important in the 1950s, through the stance of their inadequacy and ineffectiveness, to a renewed interest for public development banks at the beginning of 21st century. In this study we will concentrate on the state development banks as an important instrument of state financial support to small and medium sized enterprises (SMEs). The Republic of Srpska Investment-Development Bank (RSIDB) provided the empirical context for our research. By applying the Mann-Whitney U Test and the correlation analysis the authors examined the effect of RSIDB loans on certain business performance indicators of SMEs. From the results of Mann-Whitney U Test it can be concluded that the average sales, number of employees and net profit in the five-year period after using the RSIDB loan is statistically significantly higher for the RSIDB borrowers compared to non-borrowers. The results of correlation analysis show that there is statistically significant positive correlation of medium strength between the use of RSIDB loans and the total sales, net profit and number of employees in the 5-year period after using the RSIDB loan. The study showed the positive impact of RSIDB loans on the growth of sales, net profit and employment of SME borrowers.

Suggested Citation

  • Petrović Jadranka, 2018. "The Effects of State Development Banks on the Performance of Small and Medium Enterprises," Economic Themes, Sciendo, vol. 56(3), pages 389-411, September.
    • Handle: RePEc:vrs:ecothe:v:56:y:2018:i:3:p:389-411:n:7
    DOI: 10.2478/ethemes-2018-0023
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    References listed on IDEAS

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    More about this item

    Keywords

    state development banks; small and medium sized enterprises; business performance indicators; sales; profit; employment;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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