COVID-19 AND SMEs IN KOSOVO: ASSESSING EFFECT AND POLICY PREFERENCES

Abstract

The enforced lockdown and closure of businesses in response to the Covid-19 pandemic has resulted in economic crises across the globe, bringing the attention to entrepreneurship and its importance to economic recovery. The aim of this study is to evaluate the effects of the coronavirus pandemic on SME's and the entrepreneurs' policy preferences based on firm size and industry type. To achieve this, evidence from a Business Support Centre Kosovo's (BSCK) survey involving 236 SME owners interviewed online is reported. Findings from SME survey suggest the problems with cash flow and reduction of customer demand, among others, are major problems faced by SME's across all firm size groups and industry types. Findings from factor analysis clustered SME policy preferences into three groups: policy preferences related to financing and liquidity constraints, market related and tax preferences. This study discusses some policy and managerial implications urging the need for more nuanced and variegated understanding of the effect of coronavirus pandemic on SMEs.