An analysis of factors leading to failure of small businesses in The Dissertation

An analysis of factors leading to failure of small businesses in The Amur Region, Far East Russia - Dissertation Example This publication is important in outlining the background of the Russian policies for small businesses as well as the current business landscape in the country. For instance, there is the discourse devoted on how the business and entrepreneurship climate are currently difficult as demonstrated by the small number of small firms, the low levels of fixed capital investment as well as the capital flight that supposedly exceeded an estimated $15 billion annually. (p. 73) With this OECD (2002) report, several general factors are clearly identified that led to the successes and failures of small enterprises in Russia. In investigating the Amur experience, the corpus of literature of the regional business landscape is essential in depicting the dynamics of setting up and running businesses from policy standpoint as well as from cases of entrepreneurial outcomes. A World Bank research group argued that local government policies are crucial in the growth of small enterprises and that the â₠¬Å"regional data on small enterprises per thousand residents is considered an adequate proxy for local government support for small businesses.† (De Melo, Ofer and World Bank 1999, p10) Several regional cases were identified, compared and assessed. The outcome is an extensive investigation on policy differences, policy reforms, among other economic and political variables that were effectively linked to business performances. Extensive discussion of universal policy areas that cover small-sized businesses are also available in the publication, OECD Studies on SMEs and Entrepreneurship High-Growth Enterprises: What Governments Can Do to Make a Difference. Specific indicators on entrepreneurship that have been derived by OECD from qualitative information on laws and regulations, among other related sources could be adopted by this study at it provided clear roadmap in effectively surveying national and local administrations. These indicators and the methodologies employed to ide ntify them are contained in the OECD’s report called Measuring Innovation (2010). More recent research covering Vladimir Putin’s regime include Ganske’s (2008) book on Russia’s political economy. This work cited the economic reforms that are currently in place as well as several important factors that make small firms fail such as adverse local regulations (licensing, certification, tax inspections, fire inspections and sanitary inspections) and tax policies. (p16) This latter point was further expounded by Sakwa (2004), who argued that although Putin sought to tackle the bureaucratization of the economic landscape and that so far only two large cities have demonstrated some semblance of business dynamism, Moscow and St. Petersburg. (p. 206) Fish (2005) devoted much of his work on documenting the challenges of the effect of bureaucracy on small businesses. The research done by Dana et al. is an excellent resource on current business statistics in Russia s ince it contains critical examination of the data, particularly the numbers, which according to the authors tend to be inflated. One of the reasons given for this argument is that small business owners often â€Å"force onto de facto employees the status of individual entrepreneurs for tax purposes.†