Academic journal article Asian Social Science

Evaluation of Small Business Support's Effectiveness

Academic journal article Asian Social Science

Evaluation of Small Business Support's Effectiveness

Article excerpt

Abstract

This article is devoted to the peculiarities of the formation and support of small business in Russia. On the one hand, this sector is at a stage of development when it is in dire need of government support; on the other hand, the intensification of production and investment activities of small business largely affects the implementation of structural changes in the economy. That is why there is an urgent need to assess the effectiveness of small business support. The article clarifies the concept of small business in Russia; criteria for identifying the enterprise category of small business entities are developed; the place of the state and forms of banks' and insurance companies' in the financial programs to support small businesses are highlighted; performance indicators of supporting small business entities are identified. Also we present the method of the integrated performance calculation which could be of use in assessing the impact of small businesses on the economy of the region.

Keywords: small business, criteria, program support, banks, insurance companies, foundations, integral indices

(ProQuest: ... denotes formulae omitted.)

1. Introduction

In recent years, many books and articles on small business development in Russia has been written. However, they are at most present theoretical and practical provisions on the types of small business, organization form, the competitiveness of products, specifics of marketing strategies and plans presented to the regional aspects of development of small business, lighted foreign experience in small business, as well as the problems and prospects of development of small entrepreneurship in Russia.

However, the support of small business has received little attention and did not address the question of assessing the effectiveness of the measures to support small businesses by government agencies and banks. In this regard, we set ourselves the task of identifying performance indicators to support small businesses, as well as the development of methods of calculation of the integrated performance and assess the impact of small businesses on the economy of the region.

1.1 Developed Criteria for Identifying the Enterprise Category of the Small Enterprise

The number of employees, annual turnover in terms of value, the value of assets should be highlighted among quantitative criteria for classifying enterprises in the category of small businesses.

The term small business denotes the totality of small and medium-sized enterprises that are not directly included into any monopoly union and perform a subordinate role with respect to monopolies in the economy.

A personal risk management, specifics of the structure of assets, reflected in the prevalence of current assets over fixed assets, specifics of the structure of liabilities, characterized mainly by loan capital - could be called among the main qualitative characteristics inherent in small businesses. Additional qualitative characteristics are purpose of activities and availability of analysis of small enterprises (Table 1).

In same time the growth of micro and small enterprises was observed in the Moscow region, St. Petersburg, CFD and in Russia as a whole, and there were higher rates of growth in Russia as a whole. During the same period a drop of 4.4% was recorded in Moscow. This may be accounted for the negative impact of financial crisis, on the one hand, and for the transition of small enterprises to the simplified tax system, on the other hand. Besides, the period under consideration gave an increased number of individual entrepreneurs and, thus, the transformation of micro and small enterprises to other legal form of organization - individual entrepreneurs - is quite possible. (Acharya, 2009; Demirguc-Kunt & Detragiache, 1998; Hauswald & Marquez, 2006; Holmstrom & Tirole, 1997; Lemieux, 2014)

These facts, on the one hand, describe the enterprises as sufficiently flexible and resilient to changes in the external economic environment, but, on the other hand, determine their key dependence on changes in the internal, private factors that impact only the activity of each individual company. …

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