Determinants of Regional Entrepreneurial Activity in the Czech Republic

• Main Authors: Ondřej Dvouletý, Jan Mareš
• Format: Article
• Language: English
• Published: University of Finance and Administration 2016-07-01
• Series: ACTA VŠFS
• Subjects: determinants of entrepreneurship; regional entrepreneurial activity; registered business; GDP per capita; unemployment; R&D institutions; the Czech Republic
• Online Access: https://is.vsfs.cz/auth/repo/5260/Dvoulety_Mares_ACTA_2016_1.pdf

The following study is focused on analysis of registered businesses in the 14 regions of the Czech Republic during the period of years 1995-2013. The aim of the study was to quantify factors that affect entrepreneurial activity expressed as rate of registered businesses per capita. Based on the previous empirical studies, the determinants were selected and hypothesis stated. Formed hypothesis investigated positive impact of GDP per capita, unemployment rate and R&D institutions on rate of registered business activity. To evaluate them, data were obtained from the Czech Statistical Office and formed into dataset. Firstly, panel regressions estimated with fixed effects method were employed and secondly, Granger causality tests to evaluate the relationship between entrepreneurial activity and GDP per capita were used. Regression estimates proved positive relationship between entrepreneurial activity in Czech regions and GDP per capita, unemployment rate and support activities of R&D institutions. Positive impact was also confirmed for population density, average age, share of tertiary educated population and real R&D expenditures. Testing Granger causality proved dual causality between entrepreneurial activity and GDP per capita confirming that GDP per capita as good predictor of economic development of Czech regions. Finally, economic growth motivates Czech individuals to enter entrepreneurial activity.