Objectives and Constraints of Entrepreneurs: Evidence from Small and Medium-Size Enterprises in Russia and Bulgaria

We analyse the principal objectives and constraints of small and medium enterprises (SMEs), using data from a survey of 437 top managers (CEOs) of SMEs in Russia and Bulgaria. The CEOs display similar views and identify a small number of specific constraints as being the most important ones. The constraint on external financing is a particularly serious one, while payments for licenses or government services (insecure property rights) are not. Our analysis indicates that characteristics of the entrepreneur, the firm and the firm’s environment are important but determinants of which constraints are most important vary. The nature of both the disruption of production and the financial constraints after the fall of planning also appears to have been more ubiquitous in Russia than in Bulgaria.