AN ANALYSIS OF THE IMPACT OF THE MACRO-ENVIRONMENT ON THE EFFICIENCY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE REPUBLIC OF SERBIA
Abstract
This paper analyses the influence of macro-environment on the efficiency of small and medium-sized enterprises (SMEs) in the Republic of Serbia (RS) in period from 2004 to 2021. The aim of the paper is to identify the factors that have a positive impact on the SMEs’ business i.e. encourage their development, as well as factors with negative impact which limit their further growth. Our starting assumption is that the macro-environment has a positive impact on the development of SMEs due to the fact that number of SMEs and number of their employees and their business performances has been constantly increasing throughout the observed period. By applying regression method, on the sample of 75,000 SMEs (in 2004) to a sample of 109,000 SMEs (in 2021), impact of legal-political, economic, social, technology-related factors on ROA of SMEs in RS is examined. The results show that political instability and inefficiency in relation to the law application are a great hindrance in the development of SMEs in the Republic of Serbia, while the continuous growth of the economic activity (accompanied by an increase in the standard of living), social change (accompanied by collective welfare) and technological improvement have positive effect on the efficiency of SMEs in RS.
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DOI: https://doi.org/10.22190/TEME231208056R
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