IS INDIVIDUAL ENTREPRENEURSHIP NECESSITY OR AN OPPORTUNITY IN THE KYRGYZ REPUBLIC? A PANEL STUDY

Urmatbek Tynaliev

doi:10.12955/ejbe.v9i2.526

Abstract

The goal of this research has been to verify the theoretical discussions on the similarities of the Global Entrepreneurship Monitor (GEM) classified opportunity and necessity entrepreneurship across seven regions of Kyrgyz Republic (KR) and its capital, Bishkek city. Individual entrepreneurs with employees (IEWEs) and without employees (IEWOEs) were used as proxy dependent variables for opportunity and necessity entrepreneurship. The independent variables include unemployment rates, poverty rates, microcredit recipients, crime rate and a few others. The study period was from 2002 to 2012. The least squares dummy variable (LSDV) panel data method was employed, using dummies specifically for each region. The findings of this research from a macro perspective did not confirm those similarities. Proxy dependent variables for opportunity and necessity entrepreneurship, IEWEs and IEWOEs, are rarely affected by the same factors.

Highlights

Much research indicates that entrepreneurship plays an important role in the economies of both developing and developed countries, even when they operate in informal sectors (e.g. Uusitalo, 2001; Smallbone & Welter, 2012; Williams & Youssef, 2014)
From 2008 to 2012, more than 50% of microcredit recipients, received credits for agricultural purposes, rather than for trade or restaurant businesses, as they did early 2000s, when the share of microcredits for trade or restaurants was almost 80%. This can be explained by the increasing number of long-term microcredits, as opposed to the more prevalent short term ones in the past. This leads to the formulation of the following hypothesis: Hypothesis 3: Number of recipients of microcredits in provinces and the capital city is positively related to the total number individual entrepreneurs (IEs) as well as Individual entrepreneurs with employees (IEWEs) and individual entrepreneurs without employees (IEWOEs)
Chui and Jalal-Abad provinces are used as reference or comparison provinces and omitted in the following two least squares dummy variable (LSDV) models respectively

Summary

Introduction

Much research indicates that entrepreneurship plays an important role in the economies of both developing and developed countries, even when they operate in informal sectors (e.g. Uusitalo, 2001; Smallbone & Welter, 2012; Williams & Youssef, 2014). The following hypothesis is proposed: Hypothesis 1: The unemployment rate is positively related to the total number of IEs as well as IEWEs and IEWOEs across the provinces and capital city of KR.

Results

Conclusion