Contributions of small and medium enterprises to employment in the European Union countries

The main aim of the research is to investigate whether small- and medium-sized enterprises (SMEs) employment affects total European Union (EU-28) employment using panel data models during the 2005–2016 period. The panel econometric results con- firm the significant association between SMEs employment in ser- vice sectors and overall economy employment, whereas the effect of SMEs industry sectors employment was found insignificant. The results are robust in a spite of the fact that during the studied period the EU-28 countries experienced economic crisis suggest- ing the important role that SMEs can play in job creation and in reduction of unemployment even when macro-economic enabling environment might be less favourable