Financing – Regional Science Inquiry

Gentiana SHARKU

Professor, University of Tirana

gentianasharku@feut.edu.al

Abstract

Family business in Albania, as well as in the other countries, is the oldest dominant form of business. Usually for the small businesses which are part of this study these businesses are managed by family members, and some of family members are engaged in this business. These businesses started to recover in Albania, after the 1990 with the overthrow of communism regime. Although during this system the word “private property” almost completely disappeared from the vocabulary, again its traces remained in the focus of the family business (FB). This study is based on primary data, collected through questionnaires for family businesses. A total of 327 questionnaires are considered, covering micro and small family businesses. The questionnaires are completed by directly interviewing the individual who runs their business. The data are elaborated in SPSS, since the data were mainly of a qualitative nature. The study consists of two statistical analyses. First, Chi- square tests are performed to analyze the significance of the relationship and Second, a regression equation was performed to analyze the main factors that determine the way these businesses are financed. This study finds that the owners with high level of education are more prone to use external source of financing, the “older” businesses will finance the greater part of their activity by their own funds, and as the turnover of the previous year increases, a major part of the profit will be reinvested in the business for short-term and long-term investment.

Keywords: family business, financing, lifetime, education, turnover

JEL classification: D14, G51, M13

pp. 81-91

Filipos RUXHO

Prof. Ass. Dr., Vice President for Innovation and External Relations, Universum College, Kosovo

filip.ruxho@universum-ks.org

Christos Ap. LADIAS

Professor, Regional Science Inquiry Journal, Hellenic Association of Regional Scientists

ladias@rsijournal.eu

Abstract

All research so far, related to financing the needs of SMEs in Kosovo, show that financing remains among the main problems for starting the growth and development of the country’s economy, especially for regional small and medium-sized manufacturing enterprises. This phenomenon has created negative consequences in the growth and development of businesses in general, as well as the growth of investment activities in particular. Despite the fact that SMEs affect the generation of new jobs, poverty reduction and economic growth, SMEs in Kosovo still face various and serious challenges in business development. Among other difficulties, there is access to finance, as well as the possibility of investing from external sources, as internal sources of funding are always insufficient. Due to the strategic importance of the manufacturing industry sector in the economy of a country and knowing that for each job contributes 2.3 new jobs in the total economy, we have selected this research which also corresponds to objective 9 of sustainable development and specifically target 9.3 that promotes increased access of small industrial enterprises and other enterprises, especially in developing countries, to financial services, including affordable loans, and their integration into value chains and markets. Referring to this importance, we conducted research in 103 Kosovo regional manufacturing companies in various sectors. The survey was structured with 16 questions which will be presented in detail in this research and which confirm that the increase of financing in the productive sector contributes to the sustainable economic development of Kosovo and to the reduction of unemployment.

Keywords: Financing, Sustainable Development, SMEs, Regional Industry, target

JEL classification: A10, E43, F65, F66, H60, L60, M10, R10

pp. 117-126

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Brikena LEKA

Associate Professor, University of Tirana

brikenaleka@feut.edu.al

Etleva BAJRAMI