A Comparison of Small and Medium-Size Enterprise Development in Central and Eastern Europe

Transition from a centrally planned economy to a market economy has proved to be an enormous challenge. Differences exist between individual countries regarding the scale and efficiency of the reform process and the types and levels of socio-economic development for entrepreneurial ventures. The objective of this study is to examine differences and similarities in the environments of Small and Medium-Size Enterprises (SMEs) in two CEE transforming economies that have been in the fore-front of market reform implementation for many years. To evaluate and compare SME development relative to selected external environmental factors of entrepreneurial operations, on-site surveys and personal interviews were conducted in Hungary and Poland. The two countries selected exemplify similarities as well as differences in their approach to market reforms. Data were analyzed based on Gnyawali and Fogel's (1994) model consisting of five external environmental factors and four core values of new venture creation. Policy implications are made for assisting SME development in each country.