How Framing can Influence on the Propensity of Small Businesses to Apply Financial Instruments. Case of Poland

DOI: 10.5716/978-981-08-9514-3_MME27

Authors: Przemyslaw Kulawczuk and Andrzej Poszewiecki

Abstract:

Small and medium-sized enterprises (SME) in Central Eastern Europe are considered as the important development vehicle fostering the growth of national economies. Policy makers in this region emphasize on the financial support for the SME sector what results in improvement on the labor market. The problem lays in diversified effectiveness of financial aids for SME. Some financial aid offers are not utilized by SME while some are exhausted immediately, only when they are available. On the example of Poland, the paper presents the application of experimental behavioral simulations targeted at improvement of the efficiency of the financial aids, understood as the increase of propensity to apply financial developmental instruments. The solution which was adopted was changing framing design from typical unfriendly and bureaucratic approach to more positive, including for example additional training, better coaching, mentoring and alike. In the same time the size and construction of financial aid instruments remained unchanged. The experimental simulations show significant impact of framing on potential decisions of beneficiaries of the financial aid programs. This impact was not observed in all cases and its strength varied.

Keywords: framing, propensity to borrow, econoimic development