An empirical econometric model of a small-sized enterprise

• Published in: Microeconometrics in Business Management pp. 69 - 118
• Main Author: Wisniewski, Jerzy Witold
• Format: Book Chapter
• Language: English
• Published: United Kingdom John Wiley & Sons, Incorporated 2015; John Wiley & Sons, Ltd
• Subjects: average wages; cash inflows; empirical econometric model; employment equation; fixed assets; net payroll; sales income; small‐sized enterprise; team‐labor efficiency
• ISBN: 9781119096801; 1119096804
• DOI: 10.1002/9781119154136.ch4

An econometric model of a small‐sized enterprise mainly used for forecasts estimation of endogenous variables. The mechanism linking important economic variables of small‐sized enterprise have many features that are common with a structure of a large‐ or medium‐sized company. Specificity of a small‐sized manufacturing enterprise requires distinction of three concepts: manufacture of ready‐made production, the amount of the sales income, and the cash inflows obtained from the sales. Wages in the company affect the labor resources, both, in their quantitative as well as qualitative characteristics. Fixed assets, on one side, result from the capital investments realized by the company and, on the other, result from consumption of the assets’ components, making it necessary to carry out replacement investments. The company's net payroll depends on its current financial situation conditioned by obtaining payments for the goods delivered. The employment equation based on monthly data reveals the variable EMP's strong autoregressive relations.