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Assessing The Role Of Government In SME Performance From Ukrainian Perspective

Posted on:2020-06-22Degree:MasterType:Thesis
Country:ChinaCandidate:Denys TeterukFull Text:PDF
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This thesis raises a question of how government may influence firm performance.We establish that numerous studies are dedicated to this topic and such an influence is indirect,through business environment.Government by introducing laws,policies and regulations changes business environment.Business environment,in its turn,shapes firms.Therefore,we can observe how firms adapt and respond to certain government policies.We can as well observe what government decisions need corrections and improvements.Through differences in firm performance we analyze what are the results of government policies and decisions concerning firms.The economy of Ukraine was chosen to analyze relationship of government and firm performance.The reason for choosing Ukraine is need of assessment of its policies concerning SME sector and Ukraine is still in the transition period from planned economy to open-market,therefore,abandoning old unnecessary regulations and implementing new effective ones is needed to improve firm performance.Further,we concentrate on SME sector,since it is of utmost importance for country economy.To measure firm performance,we take into account three parameters: innovation,engagement in international trade and job creation.The reasons for such choice is numerous studies have linked these factors as important for firm's success.To measure government influence on firms through business environment,we use corruption,regulatory conditions and infrastructure,since these parameters satisfy the following criteria: have influence over firm performance,are part of business environment and are under direct control of government.This study uses World Bank Enterprise Surveys database,which is freely accessible source of firm-level data with managers' opinions on business environment,firm's peculiarities,troubles and burdens for them.Such data allows for cross-country comparison,which is proved by numerous studies that used it in similar manner.The hypothesis of this study is that in a poor business environment such as corrupted one(represented by bribery incidences),lacking stable infrastructure(represented by experiencing electric outages),overregulated(represented by time spent by senior managers dealing with government regulation),SMEs tend to create less jobs,do not actively engage in innovation,and do not participate in international trade compared with other countries.Poor business environment is related to lower innovation activities,export and job creation for businesses,especially to SMEs,since they have limited capabilities to withstand corruption,overregulation or unstable infrastructure.In this situation there are lessons to be learned about government policies related to developing SME.
Keywords/Search Tags:SME performance, government, business environment, Ukraine, Enterprise Surveys
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