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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. William Davidson Institute Working Paper, 639. William Davidson Institute at the University of Michigan, Ann Arbor MI, USA.

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Abstract

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 (Working Paper)
Official URL: http://econpapers.repec.org/paper/wdipapers/
Additional Information: © 2004 The Authors, William Davidson Institute
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Journal of Economic Literature Classification System: M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development; Role of International Organizations
P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P26 - Political Economy; Property Rights
Sets: Departments > Management
Research centres and groups > Employment Relations and Organisational Behaviour Group
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 639
Date Deposited: 25 Nov 2013 13:31
URL: http://eprints.lse.ac.uk/54591/

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