Impact of the Financial Structure on the Efficiency of Entrepreneurs in Serbia
The development of entrepreneurship has been very important for the economic growth of most countries in the world, in the recent years. However, starting up new business and its development to a successful stable organization is faced with a number of problems and limitations. Financing is a ve...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Montenegro - Faculty of Economics Podgorica
2017-09-01
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| Series: | Montenegrin Journal of Economics |
| Subjects: | |
| Online Access: | http://www.mnje.com/sites/mnje.com/files/019-030-_stevanovic_et_al.pdf |
| Summary: | The development of entrepreneurship has been very important for
the economic growth of most countries in the world, in the recent
years. However, starting up new business and its development to a
successful stable organization is faced with a number of problems
and limitations. Financing is a very serious problem for the countries
in transitions. Surveys, conducted in Serbia by the National Agency
for Regional Development, have shown that Serbian entrepreneurs
have been faced with a number of financial problems which have
directly affected their efficiency. This paper investigated whether the
problems in financial management (especially problems that depend
on the changes to financial structure) had a major impact on
the efficiency of entrepreneurs in Serbia. The aim of this paper was
to identify the key financial problems that entrepreneurs in Serbia
were facing with in the previous period and propose actions whose
implementation may lead to their reduction or elimination in the
future. Using a sample of more than 13000 entrepreneurs in Serbia
(based on the data from the Serbian Business Registers Agency) in
the period from 2004 to 2014, we found that extremely large impact
on the efficiency of entrepreneurs in Serbia had big financial
expenses and a high level of financial risk. Applying the correlation
analysis we showed that the growth of long-term debt and related
financial expenses caused the reduction of efficiency of entrepreneurs
in Serbia. Regression analysis showed that the increase in
indebtedness significantly contributed to the increase in inefficiency
and bankruptcy of large number of entrepreneurs in Serbia. |
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| ISSN: | 1800-5845 1800-6698 |