What makes small firms grow?
Subtitle: finance, human capital, technical assistance, and the business environment in Romania
By: by J. David Brown, John S. Earle, Dana Lup.
Contributors: Earle, John S.; Lup, Dana.
Series: Discussion paper ;; no. 1343; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1343
Publisher: IZA
Published: 2004
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: New business enterprises -- Romania.; Entrepreneurship -- Romania.; Small business -- Romania.
Description: "Although the development of a new private sector is generally considered crucial to economic transition, there has been rather little empirical research on the determinants of startup firm growth. This paper uses panel data techniques to analyze a survey of 297 new small enterprises in Romania containing detailed information from the startup date through 2001. We find strong evidence that access to external credit increases the growth of both employment and sales. Taxes appear to constrain growth. The data suggest that entrepreneurial skills have little independent effect on growth, once demand conditions are taken into account. The evidence for the effectiveness of technical assistance is weak: only assistance provided by foreign partners yields a positive effect. A wide variety of alternative measures of the business environment (contract enforcement, property rights, and corruption) are tested, but none are found to have any clear association with firm growth"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Includes bibliographical references.
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