Abstract
Micro, small, and medium-sized enterprises (MSMEs) are an essential part of economies at the national, regional, and local levels. Understanding the determinants of the development of this sector is interesting not only for researchers but also for local governments to support the development of this sector. This paper analyses micro, small, and medium enterprises at the gmina (local) level in one region, the Kujawsko-Pomorskie voivodship (NUTS2) in Poland. The authors use multivariate linear regression, spatial econometrics, and classification trees to model the influence of different factors on the number of enterprises relative to population size. The authors found that the most crucial factor in all cases, independently of the method used, is the local government’s revenue from personal income tax per capita. This finding, together with the lack of significance of variables related to the distance to technological parks or economic zones, indicates that the enterprises in the region produce mainly for local consumption and lack innovativeness. The authors also examined the influence of spatial context on the number of enterprises. The most important factor seems to be the percentage of built-up areas, but there are also others, depending on the model type; again, this confirms the local character of the activity of micro, small, and medium enterprises in the region. Variables representing the spatial context can explain the relative number of enterprises with coefficient of determination (R2) between 0.30 and 0.45, which shows that this context played a relatively significant role in the development of the MSME sector in the region. On the other hand, the econometric models (that include the neighborhood) are only significant (improving R2) for medium enterprises, which means that medium enterprises expand their activity beyond the local range.
Highlights
Micro, small, and medium-sized enterprises (MSMEs) are an essential part of economies at the national, regional, and local levels
The results presented in the paper indicate that spatial development largely determines the local development of micro, small, and medium enterprises
The authors’ analysis indicates that the type of entrepreneurship observed in the KujawskoPomorskie region mainly focuses on meeting the demand of local consumers and large companies, as there are more enterprises in those localities where the personal income taxes paid are higher, and in those with a smaller distance to large enterprises
Summary
Small, and medium-sized enterprises (MSMEs) are an essential part of economies at the national, regional, and local levels. Boschma and Frenken [4] described how evolutionary economics may contribute to a new and more dynamic understanding of the location of an industry They pay attention to the role of geography and firm location behavior as being price signals (neoclassical) and place-specific institutions as conditioning the range of possible (location) behaviors and potential locations, but not determining the actual (location) behavior and locational outcomes. The geographical concentration of industrial activities can generate agglomeration economies fostering start-ups and innovation and, possibly, the birth of a related industry in the region It increases the level of competition and makes the exits of firms raise the average fitness of routines. Such analysis contributes to understanding the characteristics of the MSME sector in the region, which can support recommending directions for further development of the enterprises, including their innovativeness
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