An analysis of external finance availability on SMEs' decision making: a case study of the emerging market of Poland

This article explores an understanding of the entrepreneurial behavior of small and medium enterprises (SMEs) in Poland, one of the emerging markets of the European Union, during the recent period of economic slowdown. It considers the role of accessibility to external financial resources in shaping decisions undertaken by such enterprises. The hypothesis is that, in a period of economic slowdown, SMEs that have difficulty in accessing external sources of financing adopt different strategies than those that have free access to those resources. The findings indicate that access to the external sources of financing is a statistically significant factor determining decisions of SMEs in relation to employment reduction, price reductions on goods/services, suspension of previously planned investments, and an increase in the level of salaries. Consequently, the study is important as it considers factors that impact the success and survival of SMEs in the emerging market; it is also unique, as it investigates these aspects in the recent period of the global economic downturn. © 2014 Wiley Periodicals, Inc.