Danubius International Conferences, 13th International Conference on European Integration - Realities and Perspectives

The effect of supportive policies on SME development – Kosovo case

Kosovare Ukshini, Izet Zeqiri
Last modified: 2018-04-23


This paper examines the effect of government policies affecting the development of SMEs. SMEs are promoters of economic development, but being small, they are also very vulnerable to the unfavorable business environment thus they need to be supported.

The paper will specifically address the impact of government subsidies and capital investments in supporting the development of the first SMEs in their turnover. Kosovo is a country in transition therefore it is expected that these effects will be interesting, as the opportunities of government institutions to help them are very poor either by the lack of means or by the wrong allocation of funds in sectors that have no influence in the economy.

The analysis of the results was done using econometric models such as simple OLS regression and auto-correlation vector analysis VAR. There are many studies that have provided different opinions about the effects of these supporting policies on SME development. Hence, their findings and results from empirical analysis will draw useful conclusions and recommendations.