Research project is (co)funded by the Slovenian Research Agency and by Ministry of Finance.
Project
Member of University of Ljubljana
School of Economics and Business
Code
J5-9332
Project
How to speed up growth of Slovenian enterprises: Structural dinamisation, granularity, internationalisation and innovation
Period
1.7.2018 – 30.6.2021
Range on year
1,73 FTE
Head
Research activity
Social sciences/Economics
Research organisation
Abstract
Comparison of Slovenian corporate sector with corporate sectors of other EU countries exhibits a structural deficit in small and medium-sized enterprises. Therefore, to speed up aggregate growth of the Slovenian economy, it is necessary to increase the growth dynamics of Slovenian enterprises. The objective of the project is to identify those factors of firm growth within enterprises themselves and in their macroeconomic and institutional environment that, in comparison to enterprises from other EU countries, impede faster growth of Slovenian enterprises, and factors that have the most positive impact on their growth.
The above objective puts the research in the context of the theory of firm growth. The purpose of our research can best be summarized by a combination of optimum size and resource-based theories of firm’s growth. On the one hand, resource-based theory says that firm growth depends on inherent factors within the firm, such as technology, skilled personnel, efficient procedures, brand names, trade contacts etc. and their efficient combination (organizational capabilities). On the other hand, the model of optimum firm size basically says that optimum size depends on a number of exogenous variables. Overview of existing empirical studies reveals the following determinants of firm’s growth: firm’s size, age, export propensity and broader internationalisation activity, firm owwnership, granularity (i.e. firm heterogeneity), R&D and innovation activity, human capital, and financial constraints. Firm level determinants act within industry specific factors, and relevant macro-economic and institutional factors.
In the first stage, we will estimate a model of firm growth in Slovenia and other EU countries with firm level / industry specific / macroeconomic and institutional factors of growth. In the second stage, the following specific issues of Slovenian firms' growth will be analysed in greater detail:
- Structural dynamisation of Slovenian corporate sector via resource reallocation among firms and creative destruction.
- Impact of granularity on firms' growth, i.e. first and higher-order effects of demand shocks to large hub firms on economic activity across the economy.
- Intangible capital accumulation and the dynamics of SMEs’ growth.
- Relevance of trade (exports) diversification for the growth of Slovenian firms.
- Changed patterns of internationalisation and complex internationalisation strategies.
- Impact of firms' access to finance and indebtness on their growth.
- Impacts of human capital and its diversity on firm’s growth.
- Specific importance of various aspects of business environment for SMEs.
Primary source of data will be individual firm-level data: for EU, Amadeus and World Bank Enterprise Surveys; for Slovenia, data in the safe room of Statistical Office of Slovenia, where we combine the data of AJPES (financial statements of firms), Bank of Slovenia (related to foreign-owned firms in Slovenia in Slovenian firms investing abroad), Statistical Office (labour force data, innovation survey) and state aid data.
The novelty of the reaserch is reflected in the following aspects:
- The first research of this kind for Slovenia in a comparative EU setting that will analyse micro firm level factors (based on individual firm-level data), and macroeconomic and institutional factors of firm growth in a really complex way.
- Analysing the following specific aspects of firm growth, which have not yet been analysed systematically in Slovenian case: (i) granularity, (ii) structural dynamisation of corporate sector, (iii) intangible capital accumulation as a source of SMEs’ growth, (iv) changed patterns of internationalisation and complex internationalisation strategies, (v) trade (exports) diversification, (vi) human capital diversity (vii) firms’ own financial distress and debt spillovers, (viii) business environment of particular importance for SMEs.
Researchers
The phases of the project and their realization
Coordinator of the research project – with School of Economics and Business and Faculty of Social Sciences of the University of Ljubljana, and Institute for Economic Research as participating institutions – is School of Economics and Business. Individual research tasks of the project will be carried out in cooperation of the three participating institutions. All the participating institutions have adequate research capacities, in terms of human and other resources. Participating researches exhibit well above average research and other achievements. Apart from that, participating researchers have a long record of mutual cooperation and successful joint participation in a number of international and domestic research projects. They have published a number of articles in the high ranking international journal. In 2012-2017, the two research programmes - P5-0096 in P5-0177 - in which the participating researches are members, published 28 articles in A'' journals and had 1,694 pure citations in 2007-2017. Participating research institutions also have access to the necessary data bases.
According to the detailed work programme, the project envisages nine research tasks which will be performed in cooperation of all three participating institutions. The research will be carried out according to the following deadlines for individual reserach deliverables:
D1:Determinants of firm's growth in Slovenia and other EU countries: comprehensive analysis of firm level, industry specific, macroeconomic and institutional factors,Deadline: M8
D2:Structural dynamisation of Slovenian corporate sector via resource reallocation among firms and creative destruction,Deadline: M24
D3:Impact of granularity on firms' growth, i.e. first and higher-order effects of demand shocks to large hub firms on economic activity across the economy, Deadline: M18
D4:Intangible capital accumulation as a source of SMEs’ growth, Deadline: M36
D5:Relevance of trade (exports) diversification for firms' growth, Deadline: M24
D6:Changed patterns of internationalisation and complex internationalisation strategies, Deadline: M18
D7:Impact of firms' access to finance and indebtness on their growth, Deadline: M36
D8:Impact of human capital and its diversity on firm’s growth, Deadline: M12
D9:Specific importance of various aspects of business environment for SMEs' growth, Deadline: M36
Citations for bibliographic records
Material
What makes some firms more resistant to crises than others?
The role of granularity in propagation of a micro demand shocks in Slovenia
