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Small and Medium-Sized Enterprises (SMEs): The Engine of Economic Growth through Investments and Innovation

Ştefan Gherghina (), Mihai Alexandru Botezatu (), Alexandra Hosszu () and Liliana Nicoleta Simionescu ()
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Mihai Alexandru Botezatu: Department of Informatics, Statistics and Mathematics, School of Computer Science for Business Management, Romanian-American University, 1B Expozitiei Blvd, 1st District, 012101 Bucharest, Romania
Alexandra Hosszu: Doctoral School of Sociology, University of Bucharest, 36-46 Mihail Kogălniceanu Blvd, 050107 Bucharest, Romania
Liliana Nicoleta Simionescu: Department of Finance, The Bucharest University of Economic Studies, 6 Piata Romana, 010374 Bucharest, Romania

Sustainability, 2020, vol. 12, issue 1, 1-1

Abstract: Small and medium-sized enterprises (SMEs) are crucial for local economic development, playing a noteworthy role in job creation, poverty alleviation and economic growth, but they encounter many funding barriers. The purpose of the current paper is to investigate the impact of investments and innovation on territorial economic growth, as measured by turnover, for Romanian active enterprises, especially SMEs, over the period 2009–2017. By estimating several log–log linear regressions, the quantitative outcomes provide support for a positive influence of investments on turnover. The association was confirmed both for all active enterprises at the national level, as well as for micro, small, middle-sized and big companies. As regards expenditures on innovation, a positive impact on turnover was acknowledged for all enterprises and particularly for big companies, but there was an absence of any statistically significant relation in the case of SMEs. The impact of firm size on turnover was positive for all active enterprises at the national level, along with active micro-units. Also, the estimation results show a positive impact of the number of active micro-units on territorial economic growth. The empirical findings are relevant to managers and policymakers in order to stimulate, encourage and offer support to SMEs’ development through their strategies.

Keywords: SMEs; turnover; investments; innovation; competitiveness; regression analysis (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
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