engleski

SMEs IN EU AND EMPLOYMENT-IS THERE A CONNECTION?

Small and medium enterprises (SMEs) are often perceived as an important segment of every modern economy. Through economic literature, SMEs are often seen as drivers of economic growth, new employment and it is presumed that they foster innovation. Preferential taxation of micro and small enterprises is considered as a normal feature of taxation in a number of tax systems. This paper argues the policy of preferential taxation of micro, small and medium enterprises in the context of their contribution to reduction of unemployment. We observe relationship between unemployment and four variables ; value added, employment and number of enterprises in 25 EU member states and Croatia in period from 2010 to 2013. Each variable is defined as a percentage corresponding to the each of four SME categories ; micro, small, medium and large enterprises. Major drawback of data is presence of missing data.Results indicate that only large and medium enterprises significantly influence on unemployment reduction. In the same time increase of value added of large and medium enterprises results in increase of unemployment. On the other hand increase of employment in micro enterprises is connected to rise of unemployment. Also, increase of vale added in micro enterprises results in reduction of unemployment.

value added, SMEs, unemployment, European Union

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