Abstract

This paper analyzes the impact of corruption on the establishment of new businesses through a comparative analysis of the Western Balkan countries and the developed European countries. The aim of the paper is to examine whether corruption affects the establishment of new businesses, and to identify areas that are important for starting a new business in which corruption is most present, as well as to propose measures that can mitigate the negative effects of corruption and, consequently, make more supportive environments for development of entrepreneurship. Our initial assumption is that corruption has a negative impact on the development of entrepreneurship. In order to check this hypothesis, the method of correlation and regression analysis was applied in research of corruption impact on entrepreneurship development based on a sample of 25 countries. The results of our research have shown that corruption has had a negative and statistically significant impact on the establishment of new businesses. Also, our research has shown that the impact of corruption on the development of entrepreneurship is higher in countries characterized by an insufficiently stable and underdeveloped macroeconomic environment such as the Western Balkans countries, compared to developed European countries. As study has shown, obtaining construction permit and registering property are the areas in which corruption is most pronounced.

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