THE EFFECTS OF STATE FUNDED SUPPORT ON THE SURVIVAL OF START-UP COMPANIES IN SERBIA
DOI:
https://doi.org/10.5937/Oditor2101071VKeywords:
start-up, survival rate, loans, subsidiesAbstract
This paper examines the existence of a cause-and-effect relationship between state funding and the lifespan of startup companies in Serbia. The literature is dominated by two opposing views. According to first, there is a positive impact of state financial support on the growth and the survival rate of companies. On the other hand, the prevailing notion is that state financial support for startups, especially in countries in transition, is less efficient than other state measures. The goal of this paper is to evaluate the effectiveness of state financial support for newly formed companies in Serbia, given the contradictory results presented. The starting assumption is that the financial resources that the state allocates through subsidies and dedicated loans for start-up companies in Serbia has a positive effect on the duration of their lifespan. The survey covered 100 companies that had been founded in the period of 5 to 6 years. The data obtained was statistically analyzed using appropriate non-parametric methods. Results show the presence of a positive impact of state funded support on the lifespan of start-up companies in Serbia. The results obtained can help further define state policies for the development of small and medium-sized enterprises.
Downloads
References
Amad, Z., & S. Mustafa. 2017. SMEs and its role in economic and socioeconomic development of Pakistan. International Journal of Academic Research in Accounting, Finance and Management Sciences 6, (4): 195–205. doi: 10.6007/IJARAFMS/v7-i4/3484.
Aničić, J., D. Anićić, i N. Vasić. 2017. Entrepreneurship development and financial performances in SMEs sector in Serbia. Ekonomika 63, (4): 29-39. doi:10.5937/ekonomika1704029A
Ardic, O. P., N. Mylenko, & V. Saltane. 2011. Small and medium enterprises: A cross-country analysis with a new data set. The World Bank. Retrieved 12.2019. from https://openknowledge.worldbank.org/bitstream/handle/10986/3309/WPS553.pdf?sequenc
Arsić, S. 2018. Key factors of project success in family small and mediumsized companies: The theoretical review. Management: Journal of Sustainable Business and Management Solutions in Emerging Economies, 1: 1133-40. doi: 10.7595/ management.fon.2017.0013.
Auer, M. E., D. Guralnik, & S. Ishtvan. 2018. Teaching and Learning in Digital World. Proceedings of the 20th International Conference on Interactive Collaborative Learning - Volume 1. New York: Springer. doi:10.1007/ 978-3-319-73209-1.
Culkin, N., & R. Simmon. 2018. Study of the challenges that hinder MSME development in Serbia: Country report for the British Council and Swedish Institute. Retrieved 15.01.2020. from https://uhra.herts.ac.uk/bitstream/handle/2299/20328/country_report_serbia.pdf?sequence=2&isAllowed=y
Čokorilo N., S. Nikolić, S. Milosević, D. Lazić, M. Nikolić, M. Trajkovic, i S. Djurić. 2017. Izveštaj o malim i srednjim preduzećima i preduzetništvu 2016. Ministarstvo privrede RS: Sektor za razvoj MSP i preduzetništva. Retrieved 02.02.2020. from httpss://privreda.gov.rs/wp-content/uploads/2017/11/MSPP_izvestaj_2016.pdf
Dvoulety, O., J. Cadil, & K. Mirošník. 2019. Do firms supported by credit guarantee schemes report better financial results 2 years after the end of intervention? The B.E. Journal of Economic Analysis & Policy 19, (1): 1- 24 doi:10.1515/bejeap-2018-0057.
Erić, D., S. Djuričin, i O. Pantić. 2014. Microcrediting of SMEs in the Republic of Serbia. Szabo, A. ed. Final workshop report on "Microfinance for SMEs in the Black Sea economic cooperation region". (pp. 138-157). Bucharest, Romania: BSEC & Konrad Adenauer Shiftung. Retrieved 02.03.2020. from https://www.europeanmicrofinance.org/sites/default/files/document/file/MF%20for%20SMEs%20BSEC%20Region.pdf
Erić, I. 2014. Etičko – moralne orijentacije ponašanja čoveka i organizacione kulture. Doktorska disertacija. Subotica: Ekonomski fakultet.
European Commission 2018. Commission staff working document: Serbia 2018 report. Strasbourg. Retrieved 14.02.2020. from https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20180417-serbia-report.pdf.
Fond za razvoj Republike Srbije. 2020. Krediti za podsticanje start – up preduzeća. https://fondzarazvoj.gov.rs/cir/proizvodi/start-up-krediti
Fredland, J. E., & C.E. Morris. 1976. A cross section analysis of small business failure. American Journal of Small Business 1, (1): 7-18. doi:10.1177/104225877600100102
Fukanuma, H., T. Nemoto, T., & Watanabe, W. 2006. Do governmental financial institutions help startups grow? Evidence from Japan. Keio University Working Paper. Retrieved 20.02.2020. from https://www.fbc.keio.ac.jp/~wakow/public_startup_cfs_103106.pdf.
McIntre, G. 2020. What percentage of small businesses fail? (and other need-to-know stats). Fundera (blog) Retrieved 01.04.2020 from https://www.fundera.com/blog/what-percentage-of-small-businesses-fail
Guiso, L., P. Sapienza, & L. Zingales. 2004. Does local financial development matter? The Quarterly Journal of Economics 119, (3): 929-969. doi:10.1162/0033553041502162.
Hartsenko, J., & A. Sauga, A. 2013. The role of financial support in SME and economic development in Estonia. Business & Economic Horizons 9, (2): 10-22. doi:10.15208/beh.2013.6
Hansen, H., Rand, J., & F. Tarp. 2009. Enterprise growth and survival in Vietnam: Does government support matter? The Journal of Development Studies 45, (7): 1048-1069. doi: 10.1080/00220380902811025
Herrendorf, B., & A. Teixeira. 2011. Barriers to entry and development. International Economic Review 52, (2): 573-602. doi:10.1111/j.1468-2354.2011.00639.
Jovin, S. 2016. Financing obstacles of small enterprises - empirical analysis in the Republic of Serbia. Teme - Journal for Social Science 40, (3): 1101-1118.
Kaya, H. D. 2018. Does state or local government support for small businesses attract better entrepreneurs?. Journal of Advanced Research in Management (JARM) 9, (17): 5-14. doi:10.14505//jarm.v9.1 (17).01
Kalyanasundaram, G. 2018. Why do startups fail? A case study based empirical analysis in Bangalore. Asian Journal of Innovation & Policy 7, (1): 79-102. doi: 10.7545/ajip.2018.7.1.079.
Karadağ, H. 2016. The role of SMEs and entrepreneurship on economic growth in emerging economies within the post-crisis era: An analysis from Turkey. Journal of Small Business and Entrepreneurship Development 4, (1): 22-31. doi: 10.15640/jsbed.v4n1a3-6382.
Kerr, W., & R. Nanda. 2009. Financing constraints and entrepreneurship (No. 15498). National Bureau of Economic Research. Retrieved 19.01.2019. from https://www.nber.org/papers/w15498.pdf.
Lazarević, M. M., D. Erić, i S. Kamenković. 2018. Uticaj poslovnog okruženja na performanse sektora MSPP u Srbiji. Poslovna ekonomija 22, (1): 33–53. doi:10.5937/poseko13-17281
Marjanović, D., i Lutovac, I. 2016. Procena oblasti, opsega i efekata aktivnih programa tržišta rada, sa fokusom na ugrožene kategorije, koji se sprovode putem lokalnih akcionih programa zapošljavanja u periodu 2010- 2016. Nacionalna služba za zapošljavanje. Retrieved 06.01.2020. from http://www.nsz.gov.rs/live/digitalAssets/7/7404_taj_o_proceni.pdf Republike Srbije 2020.
Minović, J., M. Lazarević–Moravčević, i I. Beraha. 2017. Strategic orientation of SMEs: Empirical research. Management: Journal of Sustainable Business and Management Solutions in Emerging Economies 21, (81): 16-26. doi: 10.7595/ management.fon.2016.0026.
Nasr, S., & Rostom, A. 2013. SME contributions to employment, job creation, and growth in the Arab world. (WBPR Working Paper No. 6682). The World Bank. Retrieved 15.08.2019. from http://documents.worldbank.org/curated/en/301631468278944687/pdf/WPS6682.pdf
Olugbola, S. A. 2017. Exploring entrepreneurial readiness of youth and startup success components: Entrepreneurship training as a moderator. Journal of Innovation & Knowledge 2, (3): 155-171. doi:10.1016/jik.2016.12.004
Peter, F., O. Adegbyui, A. Olokundun, A. Peter, A. Amaihian, & A. Ibidunni. (2018). Government financial support and financial performance of SMEs. Academy of Strategic Management Journal 17, (3): 1-10.
Shin, K., M. Choy, C. Lee, & G. Park. 2019. Government R&D subsidy and additionality of biotechnology firms: The case of the South Korean biotechnology industry. Sustainability 11, (6): 1583-1605. doi:10.3390/su11061583
Smallbone, D., & F. Welter. 2001. The role of government in SME development in transition economies. International Small Business Journal 19, (4): 63-77. doi:10.11770266242601194004
Stamenković, M., i Savić, M. 2017. Measuring regional economic disparities in Serbia: Multivariate statistical approach. Industrija 45, (3): 101-130. doi: 10.5937/industrija45-14483
Tahir, H. M., N.A. Razak, & F. Rentah. 2018. (March). The contributions of small and medium enterprises (SME’s) on Malaysian economic growth: A sectoral analysis. In International Conference on Kansei Engineering & Emotion Research, pp. 704-711). Singapore: Springer. doi: 10.1007/978-981-10-8612-0_73G
Van Rooij, A. 2015. Sisyphus in business: Success, failure and the different types of failure. Business History 57, (2): 203-223. doi: 10.1080/00076791.2014.909808
Vildo, S., & J. Masso. 2013. The impact of start-up grants on firm performance in Estonia. Estonian Discussions on Economic Policy 17: 389–404. doi:10.15157/tpep.vl7i0.927
Watson, J., & J. Everett. 1993. Defining small business failure. International Small Business Journal 11, (3): 35-48. doi:10.1177/026624269301100302
Downloads
Published
Issue
Section
How to Cite
