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Corruption as Constraint in SMEs Financial Management (I – Concept and Economic Impact)



The importance of the SMEs in economy and society is considerable, contributing to economic growth, stimulating entrepreneurship, innovation, employment or state budget revenues. However, SMEsface to many financial and organizational constraints, and various data and studies suggest that the effects of these constraints are much higher for SMEs than for large companies. Corruption is an element that reduces performance of businesses, whether we talkabout petty of corruption (bribery, speed money, gifts, un-official fees) or grand corruption, kickbacks, or other interactions between interest of large companies, corrupt politicians or hidden commissioners. While some scholars consider bribery as a factor driving the rapid delivery of government services or an opportunityfor SMEs representative to clever bypass some bureaucratic barriers, we have to admit corruption is a negative phenomenon, and SMEs have fewer chances to fight against them if they are not supported bystrong measures from the authorities or society. In this first part of our work we aimed to investigate corruption that acts as a financial constraint on SMEs, decreasing their chances of growth and consolidation, affecting business and economic outlook, reducingsociety confidence in institutions and honest business

Topics: SMEs, corruption, financial constraints, growth, Electrical engineering. Electronics. Nuclear engineering, TK1-9971, Technology, T, DOAJ:Electrical and Nuclear Engineering, DOAJ:Technology and Engineering
Publisher: Editura Universităţii din Oradea
Year: 2012
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