The Use Of EU Structural Funds By Enterprises In The Lodz Region

Abstract

<jats:p>The issue of how to stimulate economic growth and development remains an open question. The EU structural funds are meant to help solve the problem at the regional level within the framework of the cohesion policy. Only some of these funds are used to directly subsidize businesses that are the engines of growth in a market economy. This paper aims to evaluate whether structural funds have played a positive and significant role in the development of enterprises in a region which does not belong to the economic leaders in Poland. It is based on the results of a direct study, statistical data and evaluation reports, as well as on the economic literature. The direct study was conducted in 2011. It focused on micro-economic projects supported by EU funds in the Lodz region. Interviews were conducted with representatives of 80 enterprises, which had completed at least one such a project. We conclude that the subsidies from structural funds have positively stimulated the modernization of the companies, albeit on a limited scale.</jats:p>

Results of SME Investment Activities: A Comparative Analysis among Enterprises Using and Not Using EU Subsidies in Poland

“…This would be particularly severe for micro-enterprise owners who admitted that, without the financial support they received, they would not be able to implement the investment, which would have a negative impact on the company's development. This also confirms the results of research of other researchers (Dorożyński et al 2013;Mikołajczak 2014; Vasile and Mihai 2015) that access to EU funds in the form of subsidies is an important source of financing investments among SMEs, especially obtaining EU aid is cheaper than in when using financing from other sources on the commercial market.…”

“…EU funds support small-and medium-sized enterprises in development, but research shows that access to them is limited, and one of the main barriers for this sector is the need to make their own contribution. For this reason, access to EU funds in the form of non-returnable subsidies is an important source of investment financing for SMEs, especially since obtaining EU aid is cheaper than when using financing from other sources on the commercial market (Dorożyński et al 2013;Mikołajczak 2014;Vasile and Mihai 2015). In addition, in macroeconomic terms, EU funds are considered an attractive tool to finance investment opportunities, especially in times of crisis when private investment is declining (Albulescu and Goyeau 2013).…”

“…EU funds have a positive impact on the development of the enterprise, playing an important role in improving its competitive position on the market. Completed projects with the support of the EU allow the expansion of companies, modernization of production through the purchase of machinery and the use of new technologies, as well as increasing production capacity (Dorożyński et al 2013). The wide range of support available to the SME sector enables the purchase of fixed assets, land, and intangible assets as well as the use of consultancy services.…”

“…Among the surveyed enterprises of the SME sector from Lubelskie province, as a result of investment activities undertaken with the use of EU assistance, employment (13%), revenues (23%), and exports (24%) increased (Kamińska 2010). In Łódź province, 60% of the surveyed companies increased sales, although mainly only at the national level, and 85% achieved the investment objective of modernizing production and products (Dorożyński et al 2013).…”

“…Mikołajczak (2012) and Wolański (2013) even claim that EU funds are determinants of the development of the SME sector, thanks to which an improvement in the competitive position of the Polish economy and its innovation can be observed, and thus Polish enterprises are becoming an "important player" in European and global market. In addition, the positive experience and acquired skills in managing EU projects encourage entrepreneurs to apply for further grants (Dorożyński et al 2013), and investments are part of the long-term development strategy plan in these entities (Spoz 2014).…”