A four-year political term might benefit New Zealand’s small and medium size enterprises, according to new pre-election research by Massey University finance lecturer Dr Chris Malone.
Malone’s study found SMEs often struggle to cope with policy changes. A four-year election cycle would mean reforms could be implemented at a more manageable pace. He also found that SMEs have generally performed better under right-of-centre governments, possibly because left-of-centre governments do more reforming. Large firms perform well under both left- and right-leaning governments.
According to Malone, billions of dollars are lost to the economy because firms, particularly smaller ones, can’t cope with policy changes, particularly fast tracked changes, introduced by new governments.
Dr Malone’s research paper, co-written with associate professor Hamish Anderson, found small firms have performed much worse under left-of-centre governments than right-of-centre governments since 1972. It also found stock returns are generally significantly higher under right-of-centre governments.
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