Regulatory framework as the primary reason for (no)internationalization of SMEs



Abstract

The objective of this article is to identify the barriers in regulatory frameworks that affect SMEs and entrepreneurs’ participation in the international markets. The idea was to analyse how regulatory framework affects an internationalization of Small and Medium Enterprises (SMEs). Member states differ significantly in the way in which they regulate the establishment of new businesses. The reduction of legal burden in European Union is a top-priority not only for the European Commission but also for national legislators. A competitive and dynamic economy requires an adequate regulatory framework so a business friendly environment for existing and potential small and medium-sized entrepreneurs must stay one of the European Union's main objectives. The contribution of this article is to analyse how regulatory frameworks affect the internationalization of Small and Medium Enterprises (SMEs) and suggest ways to overcome the barriers to SMEs and entrepreneurs’ participation in the international markets.


Keywords

small and medium-sized enterprises (SMEs); regulatory framework; internationalization; legal form; freedom of establishment

Accounting Act. Official Gazette, NN 109/07, 54/13.

Becht, M., Mayer, C. & Wagner, H.F. (2008). Where do firms incorporate? Deregulation and the cost of entry. Journal of Corporate Finance, 14, 241-256.

Buliga, O. (2014). Measures for Innovating Business Models, Best Masters. Wiesbaden: Springer Fachmedien.

Calabro, A., Mussolino, D. & Huse, M. (2009). The role of board directors in the interna-tionalisation process of small and medium sized family businesses. Int. J. Globalisa-tion and Small Business, 3(4), 393-411.

Calciano, F., Fiordelisi, F. & Scarano, G. (2015). The Restructuring of Banks and Finan-cial Systems in the Euro Area and the Financing of SMEs. London: Palgrave Mac-milan.

Djankov, S. (2009). The regulation of entry – a Survey. World Bank Research Observer, 24(2), 183-203.

Djankov, S., La Porta, R., Lopez-de-Silanes, F. & Shleifer, A. (2002). The regulation of entry. Quarterly Journal of Economics, 117(1), 1–37.

Eckardt, M. (2014). Legal Form and Internationalization of Small and Medium-Sized Enterprises in the EU. Andrássy Working Paper Series No 31, Budapest.

Eckardt, M. & Kerber, W. (2013). Horizontal and Vertical Regulatory Competition in EU Company Law: The Case of the European Private Company (SPE). Andrássy Work-ing Paper Series No. 28, Budapest.

European Business Development Group (2016). EuroDev Whitepaper – Internationaliza-tion of small and medium-sized enterprises. Retrieved from: http://www.eurodev.com/wp-content/uploads/Internationalization-of-small-and-medium-sized-enterprises1.pdf (10.02.2016).

European Commission (2013). Top 10 most burdensome EU laws for small and medium-sized enterprises: How the Commission is helping SMEs. Published: 7 March 2013. Retrieved from: http://europa.eu/rapid/press-release_MEMO-13-168_en.htm (10.02.2016).

European Commission (2015). Annual Report on European SMEs 2014/2015 – SMEs start hiring again. doi: 10.2873/886211.

European Union (2003). Commission Recommendation of 6 May 2003 (2003/361/EC), OJ L 124.

Eurostat (2016). Eurostat Newsrelease. Eurostat Press Office, No. 201/2015. Retrieved from: http://ec.europa.eu/eurostat/documents/2995521/7076793/4-17112015-ap-en.pdf/1db58867-0264-45c0-94bf-ab079e62d63f (10.02.2016).

Federal Ministry for Economic Affairs and Energy (2016). The German Mittelstand: Facts and figures about German SMEs – Current Economic Climate. Berlin: Ger-man Federal Ministry for Economic Affairs and Energy. Retrieved from: http://www.bmwi.de/English/Redaktion/Pdf/wirtschaftsmotor-mittelstand-zahlen-und-fakten-zu-den-deutschen-kmu,property=pdf,bereich=bmwi2012,sprache=en,rwb=true.pdf (10.02.2016).

McLaughlin, S., (2013). Unlocking company law. 2nd Edition, New York: Routledge.

Mohanty, S. & Nandi, T.K. (2010). Globalization of SMEs: indepth analysis of impact of internationalization of firms. Retrieved from: http://papers.ssrn.com/sol3/papers .cfm?abstract_id=1593104 (10.02.2016).

Modina M. (2015.). Credit Rating and Bank – Firm Relationships. New Models to Better Evaluate SMEs. London: Palgrave Macmillan. doi: 10.1057/9781137496225

OECD (2005). OECD SME and Entrepreneurship Outlook: 2005. Paris: OECD.

OECD (2015). Financing SMEs and Entrepreneurs 2015: An OECD Publishing. Paris. DOI: http://dx.doi.org/10.178/fin_smeent-2015-en (10.02.2016).

Purnhagen, K. & Rott, P. (2014). Varieties of European Economic Law and Regulation. Springer International Publishing Switzerland. doi: 10.1007/978-3-319-04903-8.

Rostek, K. (2015). Benchmarking Collaborative Networks – A Key to SME Competitive-ness. Springer International Publishing Switzerland. doi: 10.1007/978-3-319-16736-7.

Singer, S. & Alpeza, M. (Eds.) (2015). Small and Medium Enterprises Report − Croatia 2014. Zagreb: CEPOR.

Small Business Development Promotion Act. Official Gazette, NN 29/02, 63/07, 53/12, 56/13.

UPS (2014). European SME Exporting Insights. Doing business throughout Europe and beyond: A UPS Consultation Paper on SME Exporting Activity. Retrieved from: http://worldsmeforum.org/wp-content/uploads/2016/04/UPS.pdf (10.02.2016).

Download

Published : 2016-10-19


GongetaS. (2016). Regulatory framework as the primary reason for (no)internationalization of SMEs. International Entrepreneurship Review, 2(2), 247-256. Retrieved from https://ier.uek.krakow.pl/index.php/pm/article/view/1127

Sanja Gongeta  sanja.gongeta@gmail.com
College of Applied Sciences “Lavoslav Ružička“ in Vukovar  Croatia



Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

1. The author agrees to publish his article free of charge in the journal "International Entrepreneurship Review" (IER) in the language of the above publication (English). The editorial staff reserves the right to shorten texts and to change titles.

2. The journal allows the authors to keep their copyrights (the copyright) in accordance with the license: Creative Commons CC-BY-ND 4.0.

Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) only the final version of the article, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). We advise to use any of the following research society portals:

- ResearchGate
- SSRN
- Academia.edu
- Selected Works
- Academic Search