Business environment quality index in the SME segment

Abstract

The aim of this paper was to define and quantify significant factors that shape the quality of the business environment in the SME segment and to create the business environment quality index. A part of this aim was a comparison of defined factors in the Czech Republic (CR) and the Slovak Republic (SR). In regards to the aim defined, a survey-based research was conducted with enterprises operating in the SME segment. 312 enterprises in CR and 329 enterprises in SR were approached during this research. To verify the defined scientific hypotheses, a custom Business Environment Quality Index was created that was quantified separately for CR and SR. The research results brought interesting findings. The aggregated Business Environment Quality Index in the Slovak Republic reached the value of 0.460, which was higher than that of the Czech Republic (0.418). Slovak entrepreneurs gave the economic factors a higher rating than Czech entrepreneurs. Similarly, Slovak entrepreneurs rated the importance of the Central Bank in establishing a stable business environment and the role of commercial banks in financing business needs more positively. The evaluation of political factors is relatively negative in both countries. Slovak entrepreneurs evaluated more positively the judicial system in the area of commercial law, the state's influence on the business environment, and the administrative burden on enterprises. Czech entrepreneurs had a minor issue with the state bureaucracy's impact on the business environment. The evaluation of technological factors is relatively negative in both countries, as the value of this index is slightly below 0.250. Slovak entrepreneurs better assessed the situation on the job market and the cooperation of the public sector with the business environment. On the contrary, Czech entrepreneurs gave the infrastructure level in the area of research and development a better rating. The evaluation of social factors is relatively positive in both countries. Entrepreneurs in the Slovak Republic perceive a more positive attitude of the society towards entrepreneurs and a more intense influence of the family on entrepreneurship, and positively evaluate media's activities in regards to the business environment. The evaluation of the competitive environment is more positive in Slovakia. When evaluating the narrower competitive environment, it was discovered that Slovak entrepreneurs think that customers, suppliers, and employees play a positive role in their business.