Fostering Entrepreneurship in Armenia

A dynamic and vibrant private sector is crucial to economic growth, with firms making new investments, creating jobs, improving productivity, and promoting growth. Entrepreneurial activity is pivotal to the continued dynamism of the private sector, with the generation of new businesses fostering competition and economic growth. This study uses data from the new 2012 World Bank entrepreneurship survey conducted to gauge new firm growth in the formal sector in Armenia and data from World Bank enterprise surveys to analyze innovative activity in existing firms. Armenia has by far the highest level of entrepreneurial activity among the three South Caucuses countries that were studied. Armenia's entrepreneurial culture is built largely on the very strong math and science foundation established during the Soviet era. However, several factors hinder business growth and entrepreneurship. The government could remove bottlenecks from the general business environment that impede able entrepreneurs with good ideas from starting a new venture and creating jobs. This would include strengthening the business environment to allow failure and company exit as a necessary part of entrepreneurial learning, company incentives that favor entrepreneurs with good ideas, instruments that enable entrepreneurs to access capital for startups, and flexible labor market policies that enable firms to expand by attracting the best talent from outside the firm or the country. The ease of paying taxes index and other business surveys continue to cite weaknesses in the country's tax administration, and arbitrary, corrupt behavior by tax officials is a major impediment to the formation and success of Small and Medium Enterprises (SMEs). The Armenian law on bankruptcy prohibits a bankrupt natural person from starting or partnering in a new business for five years, thus hampering the fresh start that should be the goal of a personal insolvency regime. Further, it requires the bankrupt debtor and 'affiliated persons' to submit property and income statements for three years, according to a regulation to be issued, which can serve as a disincentive to follow through with an insolvency proceeding.

Bibliographic Details

Main Author:	Kuriakose, Smita
Language:	English en_US
Published:	Washington, DC: World Bank 2013-08-21
Subjects:	ACCESS TO CREDIT, ACCESS TO FINANCE, ACCOUNTING, ACCOUNTING SERVICES, ADB, ADVANCED TECHNOLOGIES, ANGEL INVESTORS, AVAILABILITY OF FINANCE, BANK LOAN, BANKRUPTCY, BANKRUPTCY LAWS, BANKRUPTCY LEGISLATION, BANKS, BUSINESS ENTRY, BUSINESS ENVIRONMENT, BUSINESS OPPORTUNITIES, BUSINESS OWNERS, BUSINESS OWNERSHIP, BUSINESS PLAN, BUSINESS STARTUPS, BUYERS, CAPITAL FORMATION, CC, CHEMICAL INDUSTRY, COLLATERAL, COMMUNICATION TECHNOLOGY, COMPANY, COMPETITION LAW, COMPETITIVE ADVANTAGE, COMPETITIVENESS, COMPETITORS, CONCEPTUAL FRAMEWORK, CORRUPTION, COST OF CREDIT, CREDIT DECISION, CREDIT LINE, CREDITOR, CREDITORS, CUSTOMER BASE, CUSTOMS, DEBT, DEVELOPMENT BANK, DIVIDENDS, E-GOVERNMENT, E-GOVERNMENT INITIATIVES, E-MAIL, ECONOMIC ACTIVITY, ECONOMIC ANALYSIS, ECONOMIC CONDITIONS, ECONOMIC CRISES, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMICS, EDUCATION LEVEL, EDUCATION LEVELS, EDUCATION SYSTEM, EDUCATIONAL ATTAINMENT, EMERGING MARKETS, EMPIRICAL ANALYSIS, EMPIRICAL EVIDENCE, EMPLOYMENT GROWTH, ENDANGERED SPECIES, ENTERPRISE SURVEY, ENTERPRISE SURVEYS, ENTREPRENEUR, ENTREPRENEURIAL ABILITY, ENTREPRENEURIAL ACTIVITIES, ENTREPRENEURIAL ACTIVITY, ENTREPRENEURIAL CAPACITY, ENTREPRENEURIAL CULTURE, ENTREPRENEURS, ENTREPRENEURSHIP, ENTREPRENEURSHIP DEVELOPMENT, ENVIRONMENTAL, ENVIRONMENTAL PROBLEMS, ENVIRONMENTAL REGULATIONS, EQUIPMENT, EQUITY INVESTMENT, EXCISE TAXES, EXPANSION, EXPORT MARKETS, EXTERNAL FUNDS, EXTERNAL SHOCKS, FARMS, FINANCES, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL SUPPORT, FINANCING INSTRUMENTS, FIRM SIZE, FIRM SIZES, FIRMS, FISH, FISHING, FIXED CAPITAL, FOREIGN COMPANIES, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FOREIGN MARKETS, FORESTRY, FORMAL CREDIT, FORMAL FINANCIAL INSTITUTION, GENDER, GLOBAL MARKETS, GOVERNMENT POLICIES, GREATER ACCESS, GREENHOUSE EFFECT, HIGH UNEMPLOYMENT, HIGH-RISK INVESTMENTS, HOUSEHOLDS, HUMAN CAPITAL, HUMAN RESOURCE MANAGEMENT, HUMAN RESOURCES, IMMOVABLE PROPERTY, INCOME STATEMENTS, INEQUALITY, INFORMATION TECHNOLOGY, INITIAL INVESTMENT, INNOVATION, INNOVATIONS, INTELLECTUAL PROPERTY, INTERNATIONAL BANK, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, JOB CREATION, LABOR FORCE, LABOR MARKET, LABOR MARKET LEGISLATION, LABOR MARKETS, LABOR PRODUCTIVITY, LEGISLATION, LEVEL OF ASSETS, LICENSE, LICENSES, LICENSING, LOAN, LOCAL INDUSTRY, MARKET RESEARCH, MARKETING, MATERIAL, MEDIUM ENTERPRISE, MEDIUM ENTERPRISES, MEN ENTREPRENEURS, NATURAL RESOURCE BASE, NETWORKS, NEW BUSINESS, NEW BUSINESSES, NEW ENTRANTS, NEW MARKETS, NEW TECHNOLOGIES, OIL, OPERATING COSTS, OUTSTANDING LOAN, PARENT COMPANY, PATENTS, PERSONAL BANKRUPTCY, PHOTO, POLICY MAKERS, PRIVATE ENTERPRISE, PRIVATE INVESTMENT, PRIVATE INVESTORS, PRIVATE SECTOR, PRIVATE SECTOR DEVELOPMENT, PRIVATE SECTOR PRODUCTIVITY, PRODUCERS, PRODUCT INNOVATION, PRODUCTION CAPACITY, PRODUCTION TECHNOLOGY, PRODUCTIVITY GROWTH, PROMOTION ACTIVITIES, PROPERTY MARKETS, PROPERTY RIGHTS, PROTOTYPE, PUBLIC POLICY, QUERIES, R&D, RATES OF ENTREPRENEURSHIP, RECESSION, RED TAPE, REGISTRY, REGULATORY ENVIRONMENT, REGULATORY FRAMEWORK, REMITTANCES, REORGANIZATION, RESOURCE MANAGEMENT, RESULTS, RISK TAKING, SALES GROWTH, SAVINGS, SCIENCE FOUNDATION, SEES, SELF-EMPLOYMENT, SHOP, SHOPS, SMALL BUSINESS, SMALL BUSINESSES, SMALL FIRMS, SME, SME DEVELOPMENT, SME SUPPORT PROGRAMS, SPINOFFS, STORES, SUBSISTENCE HOUSEHOLD, TAX ADMINISTRATION, TAX RATES, TAXATION, TECHNICAL SKILLS, TECHNOLOGICAL CHANGE, TECHNOLOGICAL PROGRESS, TECHNOLOGY DIFFUSION, TECHNOLOGY TRANSFER, TELEPHONE, TIME PERIODS, TRADE FLOWS, TRAINING CENTER, TRANSITION ECONOMIES, TRANSLATION, TRANSPORT, UNEMPLOYMENT, UNEMPLOYMENT RATES, UNION, URBAN AREAS, USES, VENTURE CAPITAL, VENTURE CAPITALISTS, WOMEN ENTREPRENEURS, WORKING CAPITAL,
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18165122/fostering-entrepreneurship-armenia https://hdl.handle.net/10986/15783
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