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Table 9 A matrix of tests

From: An application of growth diagnostics on the growth of firms: with evidence from Kosovo firms

Binding finance Binding social returns
Low aggregate savings Bad finance Lack of complementary factors Low appropriability Coordination
Government failure Market failure
Ex ante Ex post  
Human capital Infrastructure & public goods (geography?) Ex ante risks Tax Low property rights, crime & corruption Low R&D
Low self-discovery
High lending interest rate Low lending interest rate
Low net cash flow from banks High net cash flow from banks (dC/C - i)
Investment elastic to interest rate Lack of investment response to interest rate change
Access to external finance is low (high country risk, high credit risk attributed to country) Number of people with high educational level is lower than in comparator countries Complementary factors (roads) are comparable to comparator countries. The only symptom emerged is related to power supply which was more emphasised by international surveys than by micro-manager survey (2013) Political risk, social risk Corruption at tax administration authority Corruption is uncontrolled Low R&D
Low innovation and therefore low self-discovery
Short loan duration, credit rationing Significantly more students enrolled in social sciences rather than natural, mathematical, engineering, and computer sciences than in comparator countries Crime is seen as a lucrative area
High deposit interest rate High spread Unfavourable export structure
Low domestic savings Interest rates on loans are significantly higher than those in comparator countries No relationship between private sector firms and universities High expectation of losing future profits Rampant tax evasion and informality in the economy Unfair competition/practices
The size of intermediation system in the country is smaller than in comparator countries Profits in banking industry are quite high, giving an indication that banks operate in a relatively monopolistic business environment Entrepreneurship learning/training is not part of national education system Rule of law is highly defective There is no coordination, no relationship between business community and governments central and local
Collection of receivables
Uncertain economic policies
Cost of doing business