Impediments on the Way to Entrepreneurship - Some New Evidence from the EU’s Post-Socialist World

Abstract

The purpose of this study is to shed light on demographic, environmental and perceptional characteristics and their impact on entrepreneurial engagement in the post-socialist region of the European Union (EU). Data from the Flash Eurobarometer Survey on Entrepreneurship 2007 are used, while a binomial probit regression model is employed. In total, 3,454 observations from eight transition economies of the EU are incorporated in the model. In the econometric analysis, a set of individual and country-level variables is used and provides evidence that males, as well as individuals whose mother was entrepreneur are more likely to engage in entrepreneurship. On the other hand, economic factors, such as unemployment and economic growth are both reported as negative determinants of self-employment. Interestingly the findings also suggest that lack of financial resources, a large number of start-up procedures and increased tax rates are all positively related to entrepreneurial engagement. Finally, risk-averse individuals are more likely to get involved with entrepreneurship compared to risk lovers. Implications are discussed analytically and it is suggested that the existing structural changes and transition process under which the examined countries operate have influenced the attitude of individuals toward entrepreneurial engagement throughout the last two decades. The study provides useful information in relation to the attitude of post-socialist society toward structural issues which possibly dishearten its engagement to entrepreneurship. First, the geographical area approves of great interest since it provides new evidence regarding the perceptions of people who live in this particular post-socialist region. Second, the time this research was conducted (i.e. 2007) means now is an ideal time for re-examination, considering that these countries have recently become members of the EU.