Abstract
The performance of Small Medium Enterprises (SMEs) play important role in economic development of a country, and it has been widely discussed that SMEs are the driving engine of economic development. In other words, by growth of SMEs, economy will be diversified, private sectors will be strengthened, unemployment will be decreased, technology and production will be improved. For SMEs in order to grow, sustainable economic performance is needed. The aim of this study is to identify the main factors affecting the economic performance of SMEs in Mongolia, make recommendation to improvement of the economic performance so that SMEs in Mongolia further influence the growth. This study uses data collected from World Bank Enterprise survey, and will use quantitative method to analyze the factors affecting the economic performance. The result of the study will be helpful for SMEs to orient itself and for policy makers. Keywords: Small & Medium Enterprises (SMEs), Mongolia, Economic Performance DOI : 10.7176/EJBM/11-21-16 Publication date :July 31 st 2019
Highlights
1.1 Research Background Small and medium enterprises (SMEs) have an important role in the economy in almost all countries around the world
SMEs make up nearly 98% of all enterprises in Mongolia (80% above are microenterprises) yet their contribution to GDP is accounted as 25% (World Bank 2015)
Our estimated model can be written as: SPERF= ƒ (CAP, LAB, COSTLAB, AGE, FIN, EXP, ) Where: SPERF is SME economic performance, CAP is physical capital the firms own, LAB is the number of labors the firm had in beginning of establishment, COSTLAB is the total cost of labor, AGE is the establishment since operation, FIN is access to finance, the amount the firm loaned from outside organization, EXP is export how much percentage the firm export in terms of total sales, and is error term
Summary
1.1 Research Background Small and medium enterprises (SMEs) have an important role in the economy in almost all countries around the world. SMEs make up nearly 98% of all enterprises in Mongolia (80% above are microenterprises) yet their contribution to GDP is accounted as 25% (World Bank 2015). From 2010 to 2013, there recorded 30 percent of increase in number of registered active enterprises in Mongolia (World Bank 2015). The Government of Mongolia has declared law on SMEs and its official definition. SME law was adopted in 2007, to improve the consistency and effectiveness of government support programs. The government has been actively pursuing to develop and promote the Small Medium Enterprises in Mongolia that SMEs are driving force of addressing the difficulties of unemployment, economic diversification and inequality
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