Abstract
The 2007 global economic crisis and public policies implemented to resolve it have modified the conditions under which enterprises operate, thus having great effects on business tactics and decisions. This paper employs a comparative analysis of the pre- and post-crisis movements of Greek small- and medium-sized enterprises (SMEs) to Bulgaria in order to examine the impact of the crisis and the applied public policy on firm-internal relocation factors, such as size, sector and relocation incentive, and the effects of relocation on business performance. Greek SME movements to Bulgaria have recently increased considerably due to the adverse effects of the crisis on the Greek economy. Results demonstrate that, while in the pre-crisis period many Greek businesspeople viewed relocation to Bulgaria as an entrepreneurial opportunity for firm expansion, since 2007 relocation has been perceived as a necessity for the vast majority of Greek entrepreneurs in order to stay in business. However, evidence is provided for a clear division between businesspeople, managing strong, and medium-sized firms and seeking business growth and improved competitiveness, and entrepreneurs who own small, unproductive enterprises and who made efforts to maintain business without seeking quality improvement. Consequently, many of them failed to stay in business since they overlooked internal to firm changes.
Highlights
Firm relocation decisions are made within diverse socio-economic frameworks and are affected by factors which are both internal and external to the firm (Brouwer et al 2004; Labrianidis 2008; Aspelund and Butsko 2010)
This paper has examined the relocation of Greek smalland medium-sized enterprises (SMEs) to Bulgaria under conditions of economic growth and decline at the macro level, in order to understand the impacts of the global economic crisis (GEC) on firm-internal factors of business mobility and the effects of relocation on business performance
Before reflecting on the findings, it is essential to reiterate the limitation of this paper: interviews on a limited number of SME owners and managers were conducted, attributable to the restricted availability of data, which is the biggest obstacle in studying Greek firms that operate in foreign countries
Summary
Firm relocation decisions are made within diverse socio-economic frameworks and are affected by factors which are both internal and external to the firm (Brouwer et al 2004; Labrianidis 2008; Aspelund and Butsko 2010). The change of location affects the economic performance of enterprises, with several scholars emphasizing the significance of changes that are both internal and external to the firm to business competitiveness (Krugman 1996; Bristow 2005; Sammarra and Belussi 2006). These insights refer to conditions of economic growth at the macro level, from the late1970s to late-2000s, when annual global GDP growth was always positive (Castells 1996). While the impact of the crisis on business growth and firm registration has been examined (Duchin et al 2010; Claessens et al 2012; Godart et al 2012), the changes in business conditions encourage a close assessment of the crisis’ effects on firm relocation, its internal factors, and its drivers
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