Impact of public subsidies on micro and small business development in Georgia

Abstract

The study evaluates the government's subsidy program for micro and small businesses in Georgia. Firms that submitted business ideas that scored over a predetermined cutoff level received investment subsidies from the program. To analyze the effect of public support on firm-level financial and economic results, we use a sharp discontinuity design applied to firm-level survey data of beneficiary and non-beneficiary enterprises. The survey data is complemented by administrative data collected by the implementing agency, Enterprise Georgia. We find a significant positive impact on participating firms' investment in the program's first year. We also find weak evidence of public subsidies crowding out private investments in subsequent years. The state support program appears to have not affected sales, employment, or access to additional finance for beneficiary firms, even in the program's early stages. The results are robust to sensitivity analysis.

An Analysis of Government Support Programs for Small Business Development and Growth

“…The findings of this survey are consistent with some of the existing research on the impact of government support programs on small business development and growth. For example, a study by the Sophiko Skhirtladze et al (2022) found that public subsidies for micro and small businesses in Georgia had positive effects on their survival, job creation, capital investment, and revenues. Similarly, a report by Lin et al (2022) highlighted the benefits of national champion programs that provide financial and non-financial support to SMEs with high growth potential in various countries.…”

Implementasi Kebijakan Desa Digital dalam Pengembangan UMKM di Desa Sidomulyo Kecamatan Silo Kabupaten Jember

“…pihak pelaku UMKM akan pentingnya berdigitalisasi marketing dan ini juga di sebabkan oleh terbatasnya informasi yang berhubungan dengan kemajuan IPTEK(Skhirtladze, 2022). Dapat diketahui kendala yang dihadapi oleh pihak pelaku UMKM terhadap program pengembangan UMKM di desa Sidomulyo yaitu pada masalah keuangan atau modal yang minim,sehingga tidak memproduksi banyak,dan produk yang telah terjual uangnya akan di putar dan langsung di gunakan kembali untuk memenuhi kebutuhan sehari hari.Dilihat dari aspek ini Pemerintah Daerah telah menetapkan tujuan dan sasaran tentang pengembangan UMKM, namun dalam pelaksanaannya berdasarkan hasil wawancara penulis dengan sejumlah informan menyatakan bahwa sasaran utama program pengembangan UMKM di Desa Sidomulyo itu masih kurang tepat sasaran, karena keterjangkauan pembuatan sertifikat Nomor Induk Berusaha (NIB) dan data pengenal UMKM.…”