Abstract
This paper compares how Czech and Slovak microentrepreneurs perceive the volume and ease of access to finance that they face. Having an adequate number of sources of finance and easier access to them can help improve both enterprise and country performance. Chi-square and Z score tests for population proportions were used to test hypotheses. 740 microenterprises from Czech Republic and 287 microenterprises from Slovakia were included for the analyses that were performed by this study. The results show that Czech microentrepreneurs feel they have more sources of finance and have easier access to them than their Slovak counterparts. These differences may in part be linked to other factors such as the experience and age of microentrepreneurs and micro-firms, amount of business loans and microfinancing organizations, credit interest rates and credit rejection rates, the relative degree of economic freedom, the volume of government guarantees, relative GDP levels, the quality of business environment and ease of doing business. Additionally, The Moran’s I spatial autocorrelation index was performed to evaluate influence of location on the perception of Czech and Slovak microenterprises that were located in different regions of both countries. The paper also discusses the results’ policy implications for governments and financial institutions.
Highlights
Microenterprises are very small businesses, they have very substantial benefits for the growth of economies, employment and income generation
To close this research gap, this study aims to investigate whether differences exist between the perceptions of Slovak and Czech microenterprises in relation to the availability of financing options, and in relation to impediments to loans
The results show that state support of the less developed regions does not affect the perception of the funding availability for microenterprises in Slovakia
Summary
Microenterprises are very small businesses, they have very substantial benefits for the growth of economies, employment and income generation. Most of microenterprises are operated in rural regions by an owner who is the only employee and the founder of a firm (Larson & Shaw, 2001) Because they may help to create a competitive environment, improve entrepreneurial competency, and encourage innovation, microenterprises are a key driver of the European economy (Kozubikova, 2016). They make a noteworthy contribution to the Czech and Slovak economies. In Slovakia 96.8% of the enterprises are microenterprises They account for 41.1% of employment and 27% of the value added. Because of the relative sizes of the two economies the Czech microenterprise sector provided the larger numbers of jobs and amount of value added (EC, 2016a)
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