Abstract
The present study determines firm and entrepreneurship characteristics of small and medium enterprises (SMEs) active in international trade towards investment and growth. Using data collected through self-administered interviews with 180 SMEs in Kosovo, we investigated factors that influence the investment growth financed by bank loans. Econometric model of linear regression indicates that a large number of firm and entrepreneur characteristics including experience, sector, business plan, audit statements, collateral significantly affect investment growth. Our findings suggest that especially education of SMEs managers have higher rate of financing sources through bank loan. The study concludes with respective findings translated into recommendations, which have to be considered by relevant stakeholders active in entrepreneurship and policymaking.
Highlights
It is widely acknowledged that small and medium enterprises (SMEs) are the engine of economic growth (Acs and Audretsch, 1990; Johnson and Loweman, 1995)
From the results obtained in the model on Appendix 2, it is evident that variable BPLAN have a positive impact on getting bank loan for firm investment
There is a correlation between achieving investments and audit statements that shows that firms which hold audit statements benefit higher investment bank loan (Guffey, 2008)
Summary
It is widely acknowledged that SMEs are the engine of economic growth (Acs and Audretsch, 1990; Johnson and Loweman, 1995). High relevance of SMEs and crucial role for the post conflict countries to overpass difficulties in their transformation period has been widely confirmed (Aidis and Estrin, 2006 Audretsch and Klepper, 2000; McMillan and Woodruff, 2002, Hoxha, 2008). The empiric studies of SME financing is of particular importance (Schiffer and Weder, 2001; Beck et al, 2005; Krasniqi, 2007). Mainly bank financing remains the most crucial element in the development of SMEs sector (World Bank, 2005). Access to financing is becoming the biggest obstacle in transition countries SMEs and in a long-run it is affecting the growth of SME sector. In comparison to big companies, small companies are always being in disadvantage concerning financing (Schiffer and Weder, 2001; Beck et al, 2005)
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