Impact of SMEs in economic growth in Albania

Abstract

SMEs are main indicators of a country’s economic development. They have a significant impact on the social development of a country. SMEs create jobs, compete with big enterprises, become part of the global market, contribute to poverty alleviation in developing countries, boost exports and reduce imports. An important objective of this study is to analyze the impact of SMEs on economic growth in Albania during the period of 1995-2015. To achieve this objective, it will be evaluated empirically the impact of SMEs on the economic growth in Albania through the use of statistical programs. It will be interpreted the casual links between SMEs and economic growth. Economic growth is determined by Gross Domestic Product at current prices (real GDP). The result achieved empirically, will be also proved thanks to the various diagnostic tests. Based on the empirical results it is evident that in the economic growth of Albania, affect major and micro enterprises. This result can be explained by the fact that large enterprises are more competitive than SMEs. They can withstand economic crises easier than SMEs, through the use of the economies of scale.

Key words: SMEs, Economic growth, Real GDP, Size of the Enterprises