Restrictive Factors for Micro-Company Growth in Latvia

Abstract

Every country is interested in entrepreneurship development as entrepreneurs form the basis for economic development, so academic researchers are looking for supportive and restrictive factors in business development. In Latvia, the majority of companies are micro and small enterprises. The aim of the paper is to investigate the restrictive factors related to the successful development of the company in Latvia, depending on the number of employees. Tasks of the research - evaluate the limiting factors influencing the development of micro-companies; find the most important factors that limit the involvement of employees and experienced managers in companies in the country, regions; compare the impact on companies by number of employees. Applied research methods: scientific publications and previous research analysis; survey of companies related of different aspects of business development; deeper analysis on factors limiting entrepreneurship development. The general population consists of all active companies registered in the Register of Enterprises of the Republic of Latvia in strategically important sectors. A questionnaire of our survey was developed for companies selected at random and the replies of 2511 companies, of which 1879 were micro-enterprises, were considered valid. The technical fieldwork of the survey was conducted by the Marketing and Public Opinion Research Center (SKDS) (interviewers conducted as CAWI - computerized web interviews). Data analysis was performed by SPSS, the main indicators of descriptive statistics were used for the analysis of survey data: indicators of central tendency or location - arithmetic mean, mode, median; indicators of variability - standard deviation, standard error of mean, range; cross-tabulations by regions and by number of employees, analysis of variance - ANOVA and factor analysis with varimax rotation. The results point to the main restrictions on business growth: increase of expenses on labour or production and unavailability of qualified employees or experienced managers.