Public Support for Small and Medium-Sized Business in the Regions of the Russian Federation

Author Name(s): Ekaterina A. Eremeeva, Natalya V. Volkova, Alina M. Khamidulina
Author Email:

Abstract

The article considers the measures of State support of small and medium entrepreneurship (SME) in particular regions of the Russian Federation. For reference we selected the Republic of Tatarstan, Amur oblast, Kamchatka Krai. Examination of these regions make it possible to compare the development of small and middle-sized business entities in different geographic regions and administrative districts of Russia. Development of small and medium-sized business (SMB) currently seems relevant for Russian regions. Small and medium-sized business put significant contribution into the regional economics, gross territorial product and the budget of the region. Those entities provide advanced competitive environment and improve the quality of goods and services. Besides, small and middle-sized business increases the number of jobs created and partially address the issue of unemployment. In this regard studying the experience of different regions of the Russian Federation in creating favorable conditions and support for small and medium-sized entrepreneurship seem appropriate. The impact of state support measures for SME is also analyzed in the article. This analysis is based on the comparison of the state support measures for SME under implementation and the level of small and medium-sized businesses development in the regions covered. The analysis resulted in the conclusion about key results and perspectives of SME development in Russia and identification of critical issues hampering it.

Introduction

Nowadays small and medium-sized businesses (SMB) are considered by researchers and politicians as a basement of socio-economic development of the state and its particular regions. SMB generate new jobs, facilitate to reduce unemployment in a region, make a considerable contribution to the regional budget by means of tax payments, attract investment to regional economics, etc. Therefore, many studies are dedicated to the impact of small and medium-sized entrepreneurship (SME) to economics of a territory [1, 2, etc.].

However, the issue of the impact of current socio-economic situation to the development and successful operation of small and medium-sized entities is not less relevant or important [3, 4, 5, etc.]. Since SMB can potentially improve socio-economic situation in a region, public sector is focused on creating enabling environment for those entities and providing assistance to them. The most common support measures for small and medium-sized entrepreneurship are subsidies from regional budgets [6, 7, 8, 9, 10, 11], government lending programmes [12], tax exemptions and simplified taxation [13] and other preferences and benefits for such companies [14, 15, 16]. Yet not even the examination of these support measures is the most essential issue. Primarily, academics pay special attention to the efficiency of the measures carried out. This article thereby deals with state support measures for SME in particular regions. The main objectives of the study are to analyse these measures as well as estimate their efficiency and prospects for Russian regions. Three subjects of the Russian Federation located in different geographic and administrative districts were selected as the study objects: Republic of Tatarstan, Amur Oblast, and Kamchatka Krai. The study outcome is expected to represent a comparison between these regions in the performance level of public support measures for SME, along with identification of key problems and prospects of regional public policy development in this area.

Conclusion

On the basis of the analysis the following conclusions can be made. None of public policies on SMB support in the regions reviewed can be described as effective. The study let us identify two groups of reasons. The first one consists of administrative reasons. These might include limited number of areas of state support for SMB, similar measures of support, low incentives to use allocated funds efficiently by entrepreneurs (beneficiaries) when providing particular types of SMB support, non-compliance of the measures implemented with the demands of entrepreneurs and socio-economic situation in region, etc.

However, based on the study it may also be concluded that implemented measures do not always lead to direct positive impact. In this regard, it is necessary to pinpoint the second group of reasons of public policy inefficiency on SMB support. These are socio-economic, ecological, geographic and other objective reasons. The article covers 3 regions located in different geographical territories. Geographical, climatic, demographic, transport, social and other conditions in the Republic of Tatarstan are significantly better in many aspects than such conditions in Kamchatka Krai or Amur Oblast. This affects the level of SMB development in these regions. Moreover, public support for SMB in any of them is not focused on improving the environment, and hence does not lead to proper outcomes.

To sum up, we might conclude that not only direct assistance to entrepreneurs should be provided, but also operational environment for business must be enhanced in different regions to comprehensively improve and achieve higher efficiency of the state policy on supporting SMB.

References

  1. Balogun, O.A., Ansary, N. Determinants of business overdraft accessibility within small and medium-sized enterprises in the South African construction industry: A case of gauteng province. Advances in Intelligent Systems and Computing, Volume 594, 2018, Pages 229-240.
  2. Memili, E., Fang, H., Chrisman, J.J., De Massis, A. The impact of small- and medium-sized family firms on economic growth. Small Business Economics, Volume 45, Issue 4, 23 July 2015, Pages 771-785.
  3. Massón-Guerra, J.L., Ortín-Ángel, P. Regional entrepreneurship capital and firm production. Small Business Economics, Volume 49, Issue 3, 5 April 2017, Pages 595-607
  4. Gherhes, C., Vorley, T., Williams, N. Entrepreneurship and local economic resilience: the impact of institutional hysteresis in peripheral places. Small Business Economics, 6 October 2017, Pages 1-14.
  5. Giudici, G., Guerini, M., Rossi-Lamastra, C. The creation of cleantech startups at the local level: the role of knowledge availability and environmental awareness. Small Business Economics, 3 October 2017, Pages 1-16.
  6. Cin, B.C., Kim, Y.J., Vonortas, N.S. The impact of public R&D subsidy on small firm productivity: evidence from Korean SMEs. Small Business Economics, Volume 48, Issue 2, 1 February 2017, Pages 345-360.
  7. Czarnitzki, D., Bento, C.L. Evaluation of public R & D policies: A cross-country comparison. World Review of Science, Technology and Sustainable Development, Volume 9, Issue 2-4, July 2012, Pages 254-282.
  8. Cerqua, A., Pellegrini, G. Industrial policy evaluation in the presence of spillovers. Small Business Economics, Volume 49, Issue 3, 12 April 2017, Pages 671-686.
  9. Cin, B.C., Kim, Y.J., Vonortas, N.S. The impact of public R&D subsidy on small firm productivity: evidence from Korean SMEs. Small Business Economics, Volume 48, Issue 2, 1 February 2017, Pages 345-360.
  10. Czarnitzki, D., Delanote, J. R&D policies for young SMEs: input and output effects. Small Business Economics, Volume 45, Issue 3, 24 October 2015, Pages 465-485.
  11. Mateut, S. Subsidies, financial constraints and firm innovative activities in emerging economies. Small Business Economics, 16 June 2017, Pages 1-32
  12. Ughetto, E., Scellato, G., Cowling, M. Cost of capital and public loan guarantees to small firms. Small Business Economics, Volume 49, Issue 2, 1 August 2017, Pages 319-337.
  13. Matus, A., Guerra, E., Fuertes, W., Gómez, M., Aules, H., Villacís, C., Toulkeridis, T. On the development of an electronic invoicing solution to integrate SMEs with a tax-collection egovernment-platform. 2017 4th International Conference on eDemocracy and eGovernment, ICEDEG 2017, 29 June 2017, Pages 94-101.
  14. Lewis, G.H. Effects of federal socioeconomic contracting preferences. Small Business Economics, 4 May 2017, Pages 1-21.
  15. Martí, J., Quas, A. A beacon in the night: government certification of SMEs towards banks. Small Business Economics, 1 February 2017, Pages 1-17.
  16. Butler, I., Galassi, G., Ruffo, H. Public funding for startups in Argentina: an impact evaluation. Small Business Economics, Volume 46, Issue 2, 1 February 2016, Pages 295-309.

 

673 total views, 2 views today

Download PDF File

About the author: admin