SMEs are Facing with Recession Trends

Miroljub Hadžić () and Petar Pavlović ()
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Miroljub Hadžić: Singidunum University
Petar Pavlović: Public Policy Secretariat of the Republic of Serbia

from Óbuda University, Keleti Faculty of Business and Management

Abstract: In 2014, in spite of some signals of recovery in the previous year, the recession trends in SME development prevailed again. It was outcome of severe water flood, low external demand related to EU recession, low domestic demand, imposed by measures of fiscal consolidation program and general, not favorable business environment. Decreasing number of new established companies and at the same time increasing number of those closed one continued. As small and opened economy, Serbia is oriented toward foreign trade, but SMEs are still not very competitive abroad, considering their share in overall volume of export and import, lower than ½ of total. As positive trend one can see increase in volume of export, faster than increase in import. Several investigations of quality of business environment proved not favorable position of SMEs with important limits of development, regarding financial problem, like collecting of claims and access to financial sources, and complicated and expensive administration. Those findings are very similar to opinion collected by interviewing of entrepreneurs, which pointed limits for investments and development of business. Difficult measures of fiscal consolidation, which are introduced in order to put public debt under control, are combined with introduction of the strategy for SME support. So, one can expect that those measures would result in more friendly business environment for SMEs, but need time to be materialized in greater number of new companies and increasing competitiveness on the international market.

Keywords: SME; crisis; business climate; support policy (search for similar items in EconPapers)
Date: 2015
ISBN: 9786155460470
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