The effect of changes in the economic structure on entrepreneurial activity in a transition economy: the case of Poland

Justyna Zygmunt

doi:10.24136/eq.2020.003

Abstract

Research background: While entrepreneurship in transition economies is the subject of a growing body of literature, the debate on factors influencing entrepreneurial activity in such economies is still incomplete. This paper extends this debate by focusing on the effect of changes in the economic structure on entrepreneurship in Poland. The findings might be supportive for policymakers in pursuing policy aimed at boosting entrepreneurship in a transition economy. Purpose of the article: The aim of the paper is to investigate the extent to which changes in the economic structure impact entrepreneurial activity in Poland. The paper contributes to the literature by providing empirical support to the pending research efforts to recognize entrepreneurship dimensions in a transition economy. Methods: The hypothesis was tested with fixed effects panel regression with robust standard errors. Data were sourced from the Statistics Poland for all Polish NUTS?2 regions for the period 2003?2017. Panel data are balanced and include 3 600 observations. Findings & Value added: This paper extends previous research on factors affecting entrepre-neurial activity in a transition economy by focusing on the importance of changes in the economic structure for new firm creation. The findings provide evidence of the significant value of the service sector in boosting entrepreneurial activity in Poland. The findings might attract attention of policymakers. Fostering structural change towards smart specialization in services should be regarded when constituting programmes supporting entrepreneurship.

Highlights

IntroductionAlbeit relatively under-researched, fields of entrepreneurship is its relationship with structural changes
One of the important, albeit relatively under-researched, fields of entrepreneurship is its relationship with structural changes
The results indicate that share of labour and gross value added per employee in the service sector matter for entrepreneurial activity in a transition economy (Model 3)

Summary

Introduction

Albeit relatively under-researched, fields of entrepreneurship is its relationship with structural changes. 7–11), the literature seems to be surprisingly silent on the effect of changes in the economic structure on entrepreneurship. Since this structure determines knowledge and technology development 64–77), it seems important to recognize how changes in the economic structure create an incentive for entrepreneurial activity. That issue seems especially important when a transition economic is considered, mostly because of the following aspects: (i) the shift from a centrally planned to a market economy involves drastic changes in the economic structure, (ii) transition to a market economy opens up the potential for evincing entrepreneurial activity, which was mostly strangled in a centrally planned economy. The goal of this paper is to fill a gap in the literature by examining the extent to which changes in the economic structure impact on entrepreneurial activity in Poland. Fixed effects panel regression with robust standard errors was used as the research method in this paper

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Discussion

Conclusion