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Why don't we see more Small- and Medium-sized Enterprises (SMEs) in Lithuania?

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  • Ruta Aidis

    (Faculty of Economics and Econometrics, University of Amsterdam)

Abstract

This paper identifies the specific external barriers to SME development in Lithuania. An analysis of 332 SME owners reveals that formal barriers (taxes, frequent changes to and ambiguity of tax policies) and environmental barriers (low purchasing power, lack of funds for business investment) form the most significant barriers for SME businesses. Informal barriers (late payment to clients, corruption, government interference) were secondary in significance. By grouping together variables according to barrier types, and using regression analysis, the inter-linkages between barrier types becomes evident. Our results suggest that the effect of business barriers is intensified by corruption, lack of information and inadequate business skills.

Suggested Citation

  • Ruta Aidis, 2002. "Why don't we see more Small- and Medium-sized Enterprises (SMEs) in Lithuania?," Tinbergen Institute Discussion Papers 02-038/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20020038
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    References listed on IDEAS

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    Cited by:

    1. Mockaitis, Audra I. & Vaiginiene, Erika & Giedraitis, Vincent, 2006. "The internationalization efforts of lithuanian manufacturing firms--strategy or luck?," Research in International Business and Finance, Elsevier, vol. 20(1), pages 111-126, March.
    2. Besnik A. Krasniqi, 2007. "Barriers To Entrepreneurship And Sme Growth In Transition: The Case Of Kosova," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 71-94.

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    Keywords

    SMEs; business barriers; Lithuania; transition economics; institutional theory; entrepreneurship;
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