Factors that influence the competitiveness of Czech rural SMEs

https://doi.org/10.17221/63/2015-AGRICECONCitation:Abrhám J., Strielkowski W., Vošta M., Šlajs J. (2015): Factors that influence the competitiveness of Czech rural SMEs. Agric. Econ. – Czech, 61: 450-460.
download PDF
The paper focuses on determining the key factors that influence the competitiveness of rural small and medium enterprises (SMEs) in the Czech Republic. Rural SMEs play an important part in sustainable rural development, post-transformation processes, as well as in the integrated development of formal and informal rural institutions in the Czech economy. The research design is based on a questionnaire survey conducted with a sample of 1144 randomly selected Czech rural SMEs. There was applied a one-way error model expressed either by the fixed effects (FE) model and the random effect (RE) model with the error term consisting of two components: a time-invariant component and a remainder component that is assumed to be uncorrelated over time. It was also attempted to rule out the individual location effects in the econometric model by using the location variables (location dummies).The results also show that the success of the rural SMEs in the Czech Republic is mostly related to its manager and enterprise characteristics. The most significant determinants of rural enterprise’s competitiveness are location within a region with competitive situation, the enterprise size, the enterprise age, and the fact whether the enterprise has some form of innovation. The results might have significant implications for both academics and stakeholders and can be used as a basis for the targeted rural enterprise policies in the Czech Republic and in the post-transitional Eastern and Central Europe.
Abrham J. (2011): Rural development and regional disparities of the new EU Member States. Agricultural Economics – Czech, 57: 288–296.
Adekunle B. (): Determinants of microenterprise performance in Nigeria. International Small Business Journal, 29, 360-373  https://doi.org/10.1177/0266242610369751
Amemiya Takeshi (1984): Tobit models: A survey. Journal of Econometrics, 24, 3-61  https://doi.org/10.1016/0304-4076(84)90074-5
Anik A.R., Bauer S., Alam M.J. (2013): Why farm households have differences in corruption experiences? Evidences from Bangladesh. Agricultural Economics – Czech, 59: 478–488.
Anim-Somuah H. (2011): Determinants of micro and small enterprise performance: The agri-food sector of Ghana. [PhD dissertation.] University of Guelph, Guelph.
Bielik P., Smutka l., Svatoš M., Hupkova D. (2013): Czech and Slovak agricultural foreign trade – two decades after the dissolution. Agricultural Economics – Czech, 59: 441–453.
Burgel O., Fier A., Licht G., Murray G. (2004): The Internationalisation of Young High-Tech Firms. Physica, Mannheim.
Czech Statistical Office (2014): Ekonomicke subjekty podle poctu zamestnancu a kraju. Available at: (accessed Nov 24, 2014].
de Mel Suresh, McKenzie David, Woodruff Christopher (2008): Returns to Capital in Microenterprises: Evidence from a Field Experiment *. Quarterly Journal of Economics, 123, 1329-1372  https://doi.org/10.1162/qjec.2008.123.4.1329
De Mel S., McKenzie D.J., Woodrufi C. (2009): Measuring microenterprise profits: Must we ask how the sausage is made? Journal of Development Economics, 88: 19–31.
Dobson S.M., Gerrard B.J. (1989): Growth and profitability in the Leeds engineering sector. Scottish Journal of Political Economy, 36: 334–352.
Evans David S. (1987): Tests of Alternative Theories of Firm Growth. Journal of Political Economy, 95, 657-  https://doi.org/10.1086/261480
Gillet S., Lehr W (1999): The availability of Broadband Internet a ccess: empirical evidence. In: 27th Annual Technical Research Conference, Alexandria, Egypt.
Greene W. (2000): Econometric Analysis. Prentice Hall, New York.
Heckman James J. (1979): Sample Selection Bias as a Specification Error. Econometrica, 47, 153-  https://doi.org/10.2307/1912352
Honig Benson (1998): What determines success? examining the human, financial, and social capital of jamaican microentrepreneurs. Journal of Business Venturing, 13, 371-394  https://doi.org/10.1016/S0883-9026(97)00036-0
Janda Karel, Rausser Gordon, Strielkowski Wadim (2013): Determinants of Profitability of Polish Rural Micro-Enterprises at the Time of EU Accession. Eastern European Countryside, 19, -  https://doi.org/10.2478/eec-2013-0009
Jenicek V. (2013): Sustainable development – indicators. Agricultural Economics – Czech, 59: 74–80.
Kadocsa G., Francsovics A. (2011): Macro and micro economic factors of small enterprise competitiveness. Acta Polytechnica Hungarica, 8: 23–40.
Mano Yukichi, Iddrisu Alhassan, Yoshino Yutaka, Sonobe Tetsushi (2012): How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? The Impacts of Experimental Basic Managerial Training. World Development, 40, 458-468  https://doi.org/10.1016/j.worlddev.2011.09.013
Mark J., Munoz S. (2010): Contemporary Microenterprise: Concepts and Cases. Edward Elgar.
Mmbengwa V.M., Ramukumba T., Groenewald J.A., van Schalkwyk H.D, Gundidza M.B., Maiwashe A.N. (2011): Evaluation of essential capacities required for the performance of farming small, micro and medium enterprise (SMEs) in South Africa. African Journal of Agricultural Research, 6: 1500–1507.
North David (1995): The Employment Generation Potential of Mature SMEs in Different Geographical Environments. Urban Studies, 32, 1517-1536  https://doi.org/10.1080/00420989550012384
Rankhumise E.M., Rugimbana R.O. (2010): Micro enterprise owner perspectives on performance: Insights from selected municipalities in Mpumalanga Province, South Africa. African Journal of Business Management, 4: 3500–3507.
Reid G. (1993): Small Business Enterprises: An Economic Analysis, Routledge, London.
Riyanti P.D. (2004). Factors influencing the success of small-scale entrepreneurs in Indonesia. In: Ongoing themes in psychology and culture. International Association for Cross-Cultural Psychology, Melbourne.
Romer D. (2011): Advanced Macroeconomics. Harvard University Press, Harvard.
Schreiner Mark, Woller Gary (2003): Microenterprise Development Programs in the United States and in the Developing World. World Development, 31, 1567-1580  https://doi.org/10.1016/S0305-750X(03)00112-8
Simoneti M., Damijan J.P., Majcen B., Rojec M. (2002): Performance after mass privatization: a case of Slovenia. Centre for the Study of Economic and Social Change in Europe, WP10, University College London, London.
Storey D.J. (1994): Understanding the Small Business Sector. Routledge, London.
Strielkowski W. (2013). Determinants of survival, growth and employment creation in Polish firms. Charles University in Prague, Faculty of Social Sciences, Prague.
Toeroek A., Tóth J. (2013): Open characters of innovation management in the Hungarian wine industry. Agricultural Economics – Czech, 59: 430–439.
Variyam Jayachandran N., Kraybill David S. (1992): Empirical evidence on determinants of firm growth. Economics Letters, 38, 31-36  https://doi.org/10.1016/0165-1765(92)90157-T
Wagner Joachim (1995): Firm size and job creation in Germany. Small Business Economics, 7, 469-474  https://doi.org/10.1007/BF01112467
Zahra Shaker A. (1996): Technology strategy and financial performance: Examining the moderating role of the firm's competitive environment. Journal of Business Venturing, 11, 189-219  https://doi.org/10.1016/0883-9026(96)00001-8
download PDF

© 2020 Czech Academy of Agricultural Sciences