'Growth Expectations of Business Owners: Impact of Human Capital, Firm Characteristics and Environmental Transition

This paper presents an empirical study based on a survey of 399 owners of small and mediumsize companies in Lithuania. Applying bivariate and ordered probit estimators, we investigatewhy some business owners expect their firms to expand, while others do not. Our mainfindings provide evidence that SME owner’s generic and specific human capital matter.Those with higher education and ‘learning by doing’ attributes, either through previous jobexperience or additional entrepreneurial experience, expect their businesses to expand. Theexpectations of growth are positively related to exporting and non-monotonically to enterprisesize. In addition, we analyse the link between the perceptions of constraints to businessactivities and growth expectations and find that the factors, which are perceived as mainbusiness barriers, are not necessary those which are associated with reduced growthexpectations. In particular, perceptions of both corruption and of inadequate tax systems seemto affect growth expectations the most....