Academic journal article European Research Studies

Small and Medium-Sized Enterprizes-Opportunities and Challenges

Academic journal article European Research Studies

Small and Medium-Sized Enterprizes-Opportunities and Challenges

Article excerpt

1. Introduction

The importance of SMEs in the Czech Republic is conveyed by the fact that in developed economies, SMEs represent nearly 90% of the total number of businesses. This size group contributes to overall employment by 50-70% and to gross national income by 30-70 % (Synek, 2006).

The current leading studies in the micro-economic climate sum up the preconditions for sustaining SMEs in several points: international dimension, growth expectation, access to finance, advisory services, and business obstacles. However, we cannot omit personal traits and talents of the entrepreneurs.

In order to understand the issue of SMEs better, it is necessary to define which businesses are classed as SMEs.

The authors of the paper discuss SMEs in a wider context, however, they focus on the stability of SMEs and credit exposure, with a hypothesis that credit exposure of SMEs holds the main influence on their bankruptcy and the total of all other factors mentioned in this paper do not have the main impact on the success of an SME; this hypothesis will be verified using statistical methods.

2. Literature Overview

Studies and subsequent papers by Breckova & Havlicek (2013a, 2013b and 2015) and Havlicek, Thalassinos and Berezkinova (2013) and Havlicek and Schlossberger (2013) are very illustrative with regards to issues such as the preference between running one's own business and being employed, and the issue of exports done by the SMEs. We must also not forget to mention major studies by the Association of Small and Medium-Sized Enterprises and Crafts discussing the issue of exports, proposals for speeding up the development of small and medium-sized enterprises, and major studies concerning accountancy (Dlaskova & Havlicek), or studies (Horak, 2012) discussing the issue of SMEs and start-ups. In terms of efficiency of SMEs, we must not forget to mention the studies (Ministry of Industry and Trade) and other studies (OECD, 2015) used by the authors of this paper as a source of statistical data. The use of statistical apparatus is based on (Rezankova & Loster, 2009) and (Skaloudova, 2015). Our hypothesis that credit exposure has a dominant impact on bankruptcy is based on research of the authors (Fidrmuc & Hainz, 2010), (Koloszar & Szeverin, 2014), (Thalassinos, Liapis & Thalassinos, 2014), (Thalassinos et al, 2010)--and on research of the respective issue in Slovakia 2000-2005 and (Chung & Huamin & Yu-Chun 2012)--research of the respective issue in Taiwan.

3. Methods Used

When studying the initial studies and during their comparison (What is an SME, 2015) and (Synek, 2006), a basis for the analysis, description and explanation of small and medium-sized enterprises was laid. The importance and definition of small and medium-sized enterprises resulted from this analysis. For the analysis of bankruptcy in correlation to the credit exposure of SMEs, measured by Outstanding business loans, SMEs, a correct definition of SMEs was selected based on (What is an SME, 2015); a Pearson correlation coefficient was used since we can expect a correlation between provided loans and the bankruptcy of SMEs, this correlation can be linear and directly proportionate, therefore complying with the conditions for the application of the Pearson correlation coefficient to measure the intensity of the correlation. The authors use a comparison of the most current research and introduce their own methodology to evaluate the issue using statistical analysis and statistical data in order to verify their hypothesis.

3.1 Opportunities for Business in SMEs

A report on the development of SME (2014) states: "7.3% of the adult population, aged 18-64, is involved in new business activities in the CR. New business activities include individuals who undertake specific steps to start their new business and those who manage companies younger than 42 months. …

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