Author(s):
1. Suzana Stefanovic, Bahamas
2. Jovo Ateljević, Ekonomski fakultet Univerziteta u Banjoj Luci, Republic of Srpska, Bosnia and Herzegovina
3. Maja Djukic-Ivanovic, Ekonomski fakultet Univerziteta u Nišu, Serbia
4. Vesna Jankovic-Milic, Ekonomski fakultet Univerziteta u Nišu, Serbia

Abstract:
Start up and development of new entrepreneurial venture require fulfillment of certain preconditions and dealing effectively with a number of challenges and constraints. The paper analyzes some of the problems that limit the growth of the entrepreneurial sector in Serbia, and preconditions to overcome those problems and challenges. The aim of the study is to identify and analyze the key prerequisites that must be met in order to mitigate or eliminate mentioned problems and enable the growth of the entrepreneurial sector in Serbia. In the course of identifying the key requirements and constraints, we started from the results of the survey of entrepreneurs and small enterprise owners, presented in Annual Survey of the National Agency for Regional Development. The results of this survey show that entrepreneurs in Serbia believe that the main prerequisites for the improvement of their businesses are: financial support by the government, reducing administrative restrictions for business, and better terms of commercial banks for credit approvement, so the factors that come from the external business environment. However, we consider that a very important prerequisite for the growth of the entrepreneurial sector in Serbia is increasing the effectiveness and efficiency of the entrepreneurial management, especially increasing the efficiency of accounts receivable, improving financial management and increasing the competitiveness of entrepreneurs, that is the factors that come from enterprises’ internal environment. Aside from the undoubtedly great influence of the government manifested in creation of stimulating environment and adequate institutional framework for the development of the entrepreneurial sector as well as direct financial incentives for the growth and development of this sector, entrepreneurs, in order to improve their business, should seek better design of the financial structure, use more efficient working capital and improve competitiveness through innovation and cost reduction. We will monitor the impact of above mentioned factors on the gross value added of SMEE sector in Serbia for the period 2004-2012. Based on the data of relevant agencies and statistical organizations, and by using methods of correlation and regression analysis, we will examine the impact of the following factors: government financial subsidies for the development of entrepreneurship, interest rates of commercial banks on loans, the number of administrative procedures for starting a business, the efficiency of managing accounts receivable of entrepreneurs, the cost competitiveness of entrepreneurs and impact of entrepreneurial financial management on gross value added of the sector. Since for the purpose of tracking efficiency of entrepreneurs’ financial management and debt collection, a number of indicators can be used, which introduction into the regression model can reduce the validity of the results and make the imbalance of macroeconomic and microeconomic indicators, the composite indexes will be used in statistical analysis. Those indexes will be created by using the factor analysis methods with the standardization of each variable. Owing to this, the effect of several independent variables on the observed phenomena will be determined, and therefore more precise results will be obtained, which will bring us to more reliable conclusions.

Key words:
entrepreneurship, small and medium enterprises, growth, value added, environmental factors, preconditions for development.

Thematic field:
Entrepreneurship, Growth and Competitiveness

Date of abstract submission:
27.09.2013.

Conference:
REDETE 2014 - Researching Economic Development and Entrepreneurship in Transition Economies

Applied paper from author