THE EMPLOYMENT STRUCTURE OF SMALL AND MEDIUM-SIZED ENTERPRISES:  NORTHERN LOCATION AND OTHER FACTORS

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Svetlana V. Doroshenko1, Irina S. Shorokhova2

1Institute of Economics of the Ural Branch of the Russian Academy of Sciences, Yekaterinburg, Russia

2Ural Federal University named after the first President of Russia B.N. Yeltsin, Yekaterinburg, Russia

1doroshenkos@mail.ru, ORCID 0000-0002-8282-6062

2i.s.shorohova@urfu.ru, ORCID 0000-0003-2854-4846

 

Abstract. Employment is a key indicator of the development of the entrepreneurial sector and of the effectiveness of national policy initiatives. A review of the literature reveals a gap in empirical research on long-term changes in the employment structure of small and medium-sized enterprises (SMEs) under the influence of supply- and demand-side factors across Russian regions. The contribution of this study is to examine the effects of selected regional characteristics—particularly educational attainment and innovation activity—on the distribution of employment across small, medium-sized, and microenterprises, as well as among sole proprietors, while accounting for their location in northern regions. The analysis uses data for 83 Russian regions covering the period 2008–2022. The models are estimated using Driscoll–Kraay standard errors. The results support the hypothesis that educational attainment and innovation activity have opposite effects on the employment structure of SMEs and sole proprietorships. Evidence of a northernness effect is also found, although its magnitude and direction vary across different types of enterprises. Higher education influences the employment structure across all SME categories, whereas in the sole proprietorship sector its effect is observed only for business owners and their employees. The relationship between northern location and the share of workers with vocational education is significant only for small and microenterprises. The relationship between northern location and the intensity of innovation activity is considerably stronger in the sole proprietorship sector and somewhat weaker for medium-sized and microenterprises. The findings have practical implications for forecasting changes in the employment structure of SMEs and for designing public policies aimed at promoting SMEs in northern regions.

Keywords: small and medium-sized enterprises, microenterprises, sole proprietorships, higher education, vocational education, patents, Russian regions, regression analysis

Acknowledgments: The article was prepared with financial support from the Russian Science Foundation, project No. 25-28-01367.

For citation: Doroshenko S. V., Shorohova I. S. The employment structure of small and medium-sized enterprises: Northern location and other factors. Sever i rynok: formirovanie ekonomicheskogo poryadka [The North and the Market: Forming  the Economic Order], 2026, no. 1, pp. 16-31. doi:10.37614/2220-802X.1.2026.91.002.

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