SSRN-id425421 - IZA DP No 1343 What Makes Small Firms Grow...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: IZA DP No. 1343 What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, and the Business Environment in Romania J. David Brown John S. Earle Dana Lup DISCUSSION PAPER SERIES Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor October 2004 What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, and the Business Environment in Romania J. David Brown Heriot-Watt University, CEU Labor Project and IZA Bonn John S. Earle Upjohn Institute for Employment Research, Central European University and IZA Bonn Dana Lup CEU Labor Project and University of Chicago Discussion Paper No. 1343 October 2004 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 Email: [email protected] This paper can be downloaded without charge at: http://ssrn.com/abstract= 425421 An index to IZA Discussion Papers is located at: http://www.iza.org/publications/dps/ Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. IZA Discussion Paper No. 1343 October 2004 ABSTRACT What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, and the Business Environment in Romania ∗ 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...
View Full Document

{[ snackBarMessage ]}

Page1 / 39

SSRN-id425421 - IZA DP No 1343 What Makes Small Firms Grow...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online