Finance, human capital, technical assistance, and the business environment in Romania

Brown, J. David, Earle, John Sutherland and Lup, Daniela (2004) Finance, human capital, technical assistance, and the business environment in Romania. Technical Report. William Davidson Institute at the University of Michigan, Ann Arbor MI, USA. . [Monograph] (doi:639)


Although the development of a new private sector is generally considered crucial to economic transition and development, there has been little empirical research on the determinants of startup firm growth. This paper uses panel data techniques to analyze a survey of 297 new small enterprises in Romania containing detailed information from the startup date through 2001. We find strong evidence that access to external finance (loans) increases the growth of both employment and sales. Taxes appear to constrain growth. There is some evidence that entrepreneurial skills increase growth, but only weak evidence for the effectiveness of technical assistance, and only when it is provided by foreign partners or international agencies. A wide variety of alternative measures of the business environment (contract enforcement, property rights, and corruption) are tested, but are found to have little or no association with firm growth.

Item Type: Monograph (Technical Report)
Additional Information: © 2004 The Authors, William Davidson Institute
Keywords (uncontrolled): small firms; entrepreneurship; microfinance; business environment
Research Areas: A. > School of Law
A. > School of Law > Criminology and Sociology
Item ID: 21358
Depositing User: Jennifer Basford
Date Deposited: 16 Feb 2017 10:52
Last Modified: 12 Jun 2019 11:36

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