Abstract:

The main objective of this study is to propose a method for evaluating the economic impacts of government incentives aimed at the development of small and medium-sized enterprises (SMEs) using the Monte Carlo simulation method. Governments in various nations implement incentive policies to stimulate SME growth, which are considered crucial to the national economic fabric. However, measuring the effectiveness of such policies represents a complex challenge due to the inherent variability and uncertainty in economic factors. In this context, the Monte Carlo method proves to be a powerful tool for modeling and analyzing the impacts of such policies through multiple scenarios. The research focuses on four ideal companies, classified as SMEs. The variables considered are typical figures contained in the annual financial statements prepared by the company. Using fictitious historical data over a decade, a simulation model is constructed to be applied to each company for different types of incentives, acting individually.
The Monte Carlo method allows generating probabilistic distributions of economic results, providing a detailed view of the variability and uncertainties associated with the impacts of government incentives. By simulating thousands of scenarios, the model estimates the likely economic performance of the SME benefiting from the incentives. Preliminary results indicate that government incentives tend to catalyze economic growth and increase SME sustainability, contributing positively to their profitability and innovative capacity. The results obtained from adopting the Monte Carlo method for evaluating real-world situations could guide policymakers in designing more effective and targeted support plans, promoting sustainable and resilient economic growth of small and medium-sized enterprises.