Firm Growth, European Industry Dynamics and Domestic Business Cycles

Oberhofer, Harald

doi:10.1111/j.1467-9485.2012.00583.x

Cited by 9 publications

(5 citation statements)

References 53 publications

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“…The coefficient for the number of observed years is not reported. In line with typical estimation results from empirical firm growth equations á la Gibrat's law (see, e.g., Coad 2009 andOberhofer 2012), the average intensive margin employment growth rate was largest in the initially smallest firms. The empirical results show that a one percent increase in the initial firm size (i.e., the firm size at the first observed year) decreases the average annual job creation rate by 5.3 to 7.9 percentage points.…”

Section: Job Creation At the Firm Level And Business Environment Percsupporting

confidence: 86%

Institutional barriers and job creation in Central and Eastern Europe

2014

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Using information from the Amadeus dataset and the Business Environment and Enterprise Performance Survey, we provide an empirical investigation of the industry and firm-specific determinants of the intensive margin (i.e., within existing firms) job creation process in eleven Central and Eastern European economies during the period 2002-2009. Our results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net intensive margin creation of jobs in the region but, by contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young already existing firms and subsidiaries of multinational corporate groups tended to register the highest employment growth rates. The empirical results also indicate that more productive surviving firms tended to be less vulnerable to the economic downturns in terms of employment change. The perceived quality of the business climate by enterprises of the region is robustly correlated with intensive margin employment growth both before and during the recent global financial crisis. Interestingly, the best performing surviving firms are estimated to be most negatively affected by a poor business environment. Institutional barriers thus appear as an important factor hampering firm growth in Central and Eastern Europe. These findings hold for the group of high-growth surviving firms (gazelles) that disproportionately accounted for the creation of new jobs in these economies. JEL classification: L16; L21; L25; L51; L53

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Section: Job Creation At the Firm Level And Business Environment Percsupporting

confidence: 86%

Institutional barriers and job creation in Central and Eastern Europe

2014

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“…On the one hand, the state of the economy directly determines profitable business opportunities, rendering economic upturns periods of strong demand, characterized by more favorable growth prospects and generally higher firm growth (Liedholm 2002;Oberhofer 2010). On the other hand, the regulatory and institutional environment shapes and determines business and the growth opportunities of establishments, and may adversely affect an establishment's growth prospects.…”

Section: Related Literaturementioning

confidence: 99%

Financing Constraints and Firm Growth in Emerging Europe

Leitner

2016

South East European Journal of Economics and Business

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Alarmingly, the burgeoning empirical literature on the causes and effects of financing constraints finds considerable and robust evidence that financing constraints severely affect firm behavior, obstruct firm performance and greatly curb firm growth. 1 Theoretically, the presence of financing constraints is ascribed to capital market imperfections such as non-negligible information asymmetries between entrepreneurs and uninformed outside investors. For instance, in the model of credit rationing developed by Stiglitz and Weiss (1981), imperfect information induces banks to resort to rationing credits instead of increasing the interest rate to maximize profits. Since the interest rate banks charge for credits also affects the riskiness of their pool of loans through an adverse selection effect and a negative incentive effect, higher interest rates would both attract riskier projects and induce debtors to realize projects with a generally lower probability of success but higher returns when successful. Hence, the on average higher riskiness of potential borrowers lowers overall profits for the banks and induces profit-maximizing banks to restrict the number of credits they grant.Empirically, a quickly growing body of literature finds strong evidence of financing constraints, but also stresses that the prevalence and extent of such constraints strongly depend on specific firm characteristics. For instance, due to insufficient collateral and resources, smaller firms are more financially constrained Sandra M. Leitner ABSTRACT The paper aims to shed light on the effects of different types of financing constraints on firm sales and employment growth in Emerging

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“…The level of GDP per capita is negatively correlated with the financial constraints met by the SMEs in the developing countries (Rajan & Zingales, 1998;Liedholm, 2002;Oberhofer, 2010;Fowowe, 2017). Thus, fewer financing constraints can be observed at SMEs operating in more developed countries with higher GDP ratios, compared with developing and less developed countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of Financing Obstacles of SMEs in Western Balkans

Gashi

Fetai

2021

Management Dynamics in the Knowledge Economy

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The main aim of this paper is to investigate the determinants of the financing obstacles and the effect of financial obstacles on the Small and Medium Enterprises (SME) growth in the Western Balkan region. The study employs OLS and probit models and using data from the Business Environment and Enterprise Survey (BEEPS V), conducted by EBRD and World Bank in the period 2012 – 2016. The econometric models used to achieve the main aim of this paper include the OLS and probit regression. From the results of the OLS, the study concludes that revealing the financial obstacles is an important determinant of SMEs’ growth in the Western Balkan countries. Further, among the firm-specific determinants of the financial constraints of SMEs, the study concludes that large firms face fewer financing obstacles than small firms, while older firms are more financially constrained than new enterprises. In addition, in the context of the ownership, findings reveal that SMEs with high foreign ownership of the firms, report fewer financial constraints. Given the presented results, it is important to emphasize the vital role of SMEs as the main employer in the Western Balkans region, emphasizing the need for policymakers to address possible reforms in achieving better regulation, institutional development, and governance efficiency, accounting standards, business, and better credit environment.

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Firm Growth, European Industry Dynamics and Domestic Business Cycles

Cited by 9 publications

References 53 publications

Institutional barriers and job creation in Central and Eastern Europe

Institutional barriers and job creation in Central and Eastern Europe

Financing Constraints and Firm Growth in Emerging Europe

Determinants of Financing Obstacles of SMEs in Western Balkans

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