EVALUATION OF SMALL BUSINESS INFLUENCE ON THE ECONOMIC DEVELOPMENT OF THE REGION

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EVALUATION OF SMALL BUSINESS INFLUENCE ON THE ECONOMIC DEVELOPMENT OF THE REGION

Journal Title: Baltic Journal of Economic Studies - Year 2017, Vol 3, Issue 5

Abstract

The purpose of the paper is to study the role and assess the small business development influence on the economic development of the region. Methods. Theoretical and methodological foundations of the research draw up the scientists’ works on the problems of economic development of the regions. During the scientific research, a complex of such methods was used: generalization and scientific abstraction – in order to specify the conceptualcategorical instrument and identify characteristics of the small business; monographic – in case of highlighting the scientists’ views on the investigated problems; comparative analysis – when identifying features of small business influence on the economic development of the region; mathematical modelling in economics – to develop the methodology for the evaluation of small business development influence on the economic development of the region. Results. Special aspects of small business functioning as a factor of the economic development of the region that accommodates economic growth, the improvement of the product quality and social indicators of development, formation of the middle class, decrease of the unemployment rate, increase of the population living standards are researched. The ambiguity of approaches to the small business definition is established, the characteristic feature of which, in most cases, is the number of employees. However, the small business is distinguished for industrial enterprises and service-oriented companies, based on the structure of management, and also taking into account the self-regulation of small enterprises or their relations to the large enterprises or industrial group of companies. It is established that criteria for the evaluation of the efficiency of small business enterprises can be: increase in the entrepreneurship development rates, minimization of material and social losses of the society, increasing the share of small business in GDP formation, raising the level of social protection of the employee. Method of the evaluation of small business development influence on the economic development of the region is proposed, which provides: the allocation of the priority areas of activity of small business entities that have a positive effect on the correspond territory; formation of the aggregate indices representing each of these areas; establishment of connection between the researched areas of the small business influence with the economic development of the region; building-up the compound integrated index based on the results of the correlation analysis parameters that have an effect on the economic development of regions; evaluation of the contribution extent of the small business to the economic development level of each region. Practical meaning. It is established that the functioning of small businesses significantly influences the sectoral structure of the territory and the level of the population employment, while the influence on the infrastructure and the ecological state of the region is not so considerable. Factors, that determine the efficiency level of the small business functioning and also have a significant influence on the economic development level of the region are singled out, namely: the number of small enterprises; products sold turnover; the number of employed and the proportion of employees in the small businesses. Taking into account the specifics of small business, its strong influence on the economic condition of the local territories is substantiated, which in its turn determines the necessity for conducting the complementary measurements involving a local survey of the statistical information, particularly in large cities, mountainous areas, zones of ecological disaster. The methodology for the evaluation of the small businesses functioning at the local level allows us to specify actual reasons that stem the tide of small business in existing locations and to formulate the measures for their elimination. Value/originality. On the ground of the conducted research, the conceptual principles of the small business influence assessment on the economic development of the region are proposed, which took the basis of the scientific research on formation effective model sustainable development region.

Authors and Affiliations

Olena Zvarych

Keywords

EP ID EP635234
DOI 10.30525/2256-0742/2017-3-5-151-156
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