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Trends and Factors of Development of Small and Medium-sized Businesses in Russian Regions during Сorona Crisis

Stepan P. Zemtsov – Director of Centre for Economic Geography and Regionalism of the Russian Presidential Academy of National Economy and Public Administration; Senior Researcher of the Gaidar Institute for Economic Policy, Candidate of Geographic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander A. Mikhaylov – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In 2020, small and medium-sized businesses (SMEs) suffered from anti-epidemic measures and falling incomes of the population. We sought to identify trends and factors that influence the dynamic of the SME sector in the regions of Russia.

A stronger decline in the number of SMEs was observed in the largest agglomerations, northern resource-rich and boundary regions, which was adversely affected by the stringiness of quarantine measures, and positively – by a relatively high level of income of the population, a favorable business climate and a large consumer market. The growth of employment in the SME sector in Russia is partly due to anti-crisis measures, the transition of a number of large companies to medium-sized status, as well as statistical effects. In agglomerations with large markets and a high level of digitalization, employment grew stronger.

It is necessary to extend the SME support programs in 2021. Particular attention should be paid to supporting the digitalization of business, improving the business climate in the regions and increase the accessibility of large markets for SMEs.

The article was written on the basis of the RANEPA state assignment research programme for 2020.

Key words: small and medium-sized business, pandemic, crisis, affected by the crisis industries, investment attractiveness index.

JEL-codes: R11, R15, L26, C23.