Skip to main navigation menu Skip to main content Skip to site footer

What works and what does not work in local entrepreneurship support policy?

DOI:

https://doi.org/10.15678/EBER.2023.110310

Abstract

Objective: The article aims to determine the influence of specific entrepreneurship support instruments in each type of municipality on the increase entrepreneurship level as measured by the number of newly established companies in the area.

Research Design & Methods: A survey was conducted among 896 Polish municipalities, asking about four areas of entrepreneurship support: cooperation of the commune with entrepreneurs; finance, tax, and administration support; attracting investors, granting external funds by the commune; and supporting non-governmental organizations. To determine the relationship between the type of commune, the instrument used, and the effectiveness of the tool used, we used a generalized reduced gradient non-linear algorithm.

Findings: The study results proved that there is no one universal area or instrument that would guarantee with high probability success in the form of an increase in the level of entrepreneurship in a municipality, regardless of its type. It was shown that in specific types of municipalities, it is possible to identify tools that are more effective than others.

Implications & Recommendations: This knowledge can and should provide important guidance to decision-makers at the local level, showing tools that may work better in their type of municipality.

Contribution & Value Added: The identification of specific tools that work for a particular type of municipality is an important stimulus in the discussion on strengthening the effectiveness of Polish municipalities’ policies.

Keywords

entrepreneurship, support instruments, municipal entrepreneurship, local development, local government support

pdf

Author Biography

Jacek Rodzinka

PhD in economics (John Paul II Catholic University of Lublin, 2005), Master of Economics (Maria Curie-Skłodowska University in Lublin, 1999). His research interests include: entrepreneurship, local and regional development, clusters, social security.

Correspondence to: PhD Jacek Rodzinka, University of Information Technology and Management in Rzeszow, Faculty of Management, Institute for Financial Research and Analyses, ul. Sucharskiego 2, 35-225 Rzeszow, Poland, e-mail: jrodzinka@wsiz.edu.pl

ORCID  https://orcid.org/0000-0002-4003-0891

Tomasz Skica

Prof.

Department of Entrepreneurship, University of IT and Management in Rzeszow

 

Head of the Department of Entrepreneurship. Habilitated doctor of social sciences in the discipline of economics and finance. Since 2002, he has been professionally associated with the University of Information Technology and Management in Rzeszów. Editor-in-chief of the Financial Internet Quarterly. Lecturer at UITM postgraduate studies. Cisco Entrepreneur Institute (CEI) trainer. An expert in the field of public finances (in particular the finances of local government units).

Elżbieta Ociepa-Kicińska

Ph.D.

Institute of Spatial Management and Socio-Economic Geography, University of Szczecin

 Assistant Professor at the Institute of Spatial Management and Socio-Economic Geography, Faculty of Economics, Finance and Management, University of Szczecin Poland. His scientific research focuses on data analysis and his core areas of interest are multivariate statistical methods and quantitative methods in regional development. He is author of several publications on this subject.

Rafał Czyżycki

Ph.D.

Institute of Spatial Management and Socio-Economic Geography, University of Szczecin

 Assistant Professor at the Institute of Spatial Management and Socio-Economic Geography, Faculty of Economics, Finance and Management, University of Szczecin Poland. His scientific research focuses on data analysis and his core areas of interest are multivariate statistical methods and quantitative methods in regional development. He is author of several publications on this subject.


References

  1. Abdi, H. (2007). Multiple Correlation Coefficient. [In] N.J. Salkind (Ed.), Encyclopedia of Measurement and Statistics (pp. 648-651). Sage, Thousand Oaks, Newbury Park.
  2. Andersson, M., Koster, S., & Lavesson, N. (2016). Are start-ups the same everywhere?: The urban–rural skill gap in Swedish entrepreneurship. [In] E.A. Mack (Ed.), Geographies of entrepreneurship (pp. 122-142). Routledge, London.
  3. Audretsch, D., & Feldman, M.P. (2004). Knowledge spillovers and the geography of innovation. [In] Handbook of Regional and Urban Economics (pp. 2713–2739). Elsevier. Retrieved from https://econpapers.repec.org/bookchap/eeeregchp/4-61.htm on December 5, 2022.
  4. Audretsch, D.B., & Keilbach, M. (2005). Entrepreneurship capital and regional growth. The Annals of Regional Science, 39, 457-469. https://doi.org/10.1080/0034340042000280956
  5. Audretsch, D.B., Kuratko, D.F., & Link, A.N. (2015). Making sense of the elusive paradigm of entrepreneurship. Small Business Economics, 45, 703-712. https://doi.org/10.1007/s11187-015-9663-z
  6. Baker, T., & Nelson, R.E. (2005). Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative Science Quarterly, 50(3), 329-366. https://doi.org/10.2189/asqu.2005.50.3.329
  7. Banski, J. (2016). Development of entrepreneurship in rural areas - diagnosis and challenges. Studies of the National Spatial Development Committee of the Polish Academy of Sciences, (167), 274-284.
  8. Bjørnå, H., & Aarsæther, N. (2010). Local government strategies and entrepreneurship. International Journal of Innovation and Regional Development, 2(1-2), 50-65. https://doi.org/10.1504/IJIRD.2010.029854
  9. Bosma, N., & Sternberg, R. (2014). Entrepreneurship as an urban event?. Empirical evidence from European cities. Regional Studies, 48(6), 1016-1033. https://doi.org/10.1080/00343404.2014.904041
  10. Bosworth, G. (2012). Characterising rural businesses–Tales from the paperman. Journal of Rural Studies, 28(4), 499-506. https://doi.org/10.1016/j.jrurstud.2012.07.002
  11. Bosworth, G., & Atterton, J. (2012). Entrepreneurial in‐migration and neoendogenous rural development. Rural Sociology, 77(2), 254-279.
  12. Brooks, C., Vorley, T., & Gherhes, C. (2019). Entrepreneurial ecosystems in Poland: Panacea, paper tiger or Pandora’s box?. Journal of Entrepreneurship and Public Policy, 8(3), 319–338. https://doi.org/10.1108/JEPP-04-2019-0036
  13. Brzozowska, K., Gorzałczyńska-Koczkodaj, M., Kogut-Jaworska, M., & Szaja, M. (2018). Financial determinants of local and regional development. Krakow-Legionowo: edu-Libri.
  14. Chomiak-Orsa, I., & Flieger, M. (2012). Stimulating local economic development. An attempt to assess the effectiveness of extra-budgetary activities of communes. Scientific Notebooks/Higher School of Land Forces Officers Gen. T. Kosciuszko, 177-185.
  15. Dees, J.G. (1998). Enterprising nonprofits: What do you do when traditional sources of funding fall short. Harvard Business Review, 76(1), 55-67.
  16. Escandón-Barbosa, D.M., Urbano, D., Hurtado-Ayala, A., & Dominguez, A.Z. (2019). Formal institutions, informal institutions and entrepreneurial activity: A comparative relationship between rural and urban areas in Colombia. Journal of Urban Management, 8(3), 458-471. Retrieved from http://www.journals.elsevier.com/journal-of-urban-management on October 10, 2022.
  17. Fazlagić, J., Szulczewska-Remi, A., & Loopesko, W. (2021). City policies to promote entrepreneurship: A cross-country comparison of Poland and Germany. Journal of Entrepreneurship, Management and Innovation, 17(2), 159-185 https://doi.org/10.7341/20211726
  18. Frenkel, A. (2001). Why high-technology firms choose to locate in or near metropolitan areas. Urban Studies, 38(7), 1083-1101. https://doi.org/10.1080/00420980120051666
  19. Fritsch, M., & Mueller, P. (2008). The effect of new business formation on regional development over time: The case of Germany. Small Business Economics, 30, 15–29. Retrieved from s11187-007-9067-9.pdf (springer.com) on October 10, 2022.
  20. Granovetter, M. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3), 481-510. Retrieved from https://www.jstor.org/stable/2780199 on October 10, 2022.
  21. Henderson, J. (2002). Building the rural economy with high-growth entrepreneurs. Economic Review-Federal Reserve Bank of Kansas City, 87(3), 45-75.
  22. Henderson, J., Low, S., & Weiler, S. (2007). The drivers of regional entrepreneurship in rural and metro areas. [In] N.Walzer (Ed.), Entrepreneurship and Local Economic Development (pp. 81-102). Lexington Books.
  23. Hollick, M., & Braun, P. (2005). Lifestyle entrepreneurship: the unusual nature of the tourism entrepreneur. Proceedings of the Second Annual AGSE International Entrepreneurship Research Exchange, Swinburne Press, Melbourne, 10(11), 1-17.
  24. Hustedde, R. (2007). What’s culture got to do with it? Strategies for strengthening an entrepreneurial culture. Entrepreneurship and local economic development. [In] N. Walzer (Ed.), Entrepreneurship and local economic development (pp. 39-58). New York: Lexington Books.
  25. Inglot-Brzęk, E., & Skica, T. (2017). Differentiation of the effects of the use of entrepreneurship support instruments by the local government due to the criterion of the generic category of the commune. Territorial Self-Government, (6), 24-53.
  26. Isenberg, D. (2019). The Key to Economic Growth? Local Entrepreneurship. Babson Thought & Action. Retrieved from https://entrepreneurship.babson.edu/the-key-to-economic-growth-local-entrepreneurship/ on December 5, 2022.
  27. Klofsten, M., Norrman, C., Cadorin, E., & Löfsten, H. (2020). Support and development of small and new firms in rural areas: a case study of three regional initiatives. SN Applied Sciences, 2, 1-9. https://doi.org/10.1007/s42452-019-1908-z
  28. Korsgaard, S., Müller, S., & Tanvig, H. (2015). Rural entrepreneurship or entrepreneurship in the rural—between place and space. International Journal of Entrepreneurial Behavior & Research, 21(1), 5–26. https://doi.org/10.1108/IJEBR-11-2013-0205
  29. Lombardi, S., & Sforzi, F. (2016). Chinese manufacturing entrepreneurship capital: Evidence from Italian industrial districts. European Planning Studies, 24(6), 1118–1132. https://doi.org/10.1080/09654313.2016.1155538
  30. Madzivhandila, T.S., & Musara, M. (2020). Taking responsibility for entrepreneurship development in South Africa: The role of local municipalities. Local Economy, 35(3), 257–268. https://doi.org/10.1177/0269094220922820
  31. Mickiewicz, T., Rodzinka, J., & Skica, T. (2016). Local and regional entrepreneurship support factors. Clustering, promotion, consulting and local social capital. Warsaw: C.H. Beck.
  32. Mickiewicz, T., Skica, T., Sauka, A., & Timofejevs, A. (2021). The role of local government instruments and economic and social self-organization in generating entrepreneurship in Poland and Latvia. Territorial Self-Government, 371(11), 10-25.
  33. Müller, S. (2016). A progress review of entrepreneurship and regional development: What are the remaining gaps?. European Planning Studies, 24(6), 1133–1158. https://doi.org/10.1080/09654313.2016.1154506
  34. Naldi, L., Larsson, J.P., & Westlund, H. (2020). Policy entrepreneurship and entrepreneurial orientation in vulnerable Swedish municipalities. Entrepreneurship & Regional Development, 32(7-8), 473-491. https://doi.org/10.1080/08985626.2020.1798557
  35. OECD. (2019). OECD SME and Entrepreneurship Outlook 2019. OECD. Retrieved from https://www.oecd.org/industry/oecd-sme-and-entrepreneurship-outlook-2019-34907e9c-en.htm on December 5, 2022.
  36. Olsson, A.R., Westlund, H., & Larsson, J.P. (2020). Entrepreneurial Governance and Local Growth. Sustainability, 12(9), 3857. https://doi.org/10.3390/su12093857
  37. Pagano, A., Petrucci, F., & Bocconcelli, R. (2020). Passion-driven entrepreneurship in small and medium-sized towns: Empirical evidence from Italy. Journal of Business & Industrial Marketing, ahead-of-print(ahead-of-print). https://doi.org/10.1108/JBIM-05-2019-0259
  38. Poniatowicz, M., & Wyszkowska, D. (2014). Stimulating the development of local entrepreneurship and tax competition of municipalities. Financial and Tax Aspects of Regional Enterprise Development, 73, 73-93.
  39. Porter, M.E., & Stern, S. (2001). National innovative capacity. The global competitiveness report, 2002, 102-118. Retrieved from https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=b334b58a35aec2b52253c6de9de1d1218e564004 on December 12, 2022.
  40. Prange, H. (2008). Explaining varieties of regional innovation policies in Europe. European Urban and Regional Studies, 15(1), 39-52. https://doi.org/10.1177/0969776407081276
  41. Renski, H. (2008). New firm entry, survival, and growth in the United States: A comparison of urban, suburban, and rural areas. Journal of the American Planning Association, 75(1), 60-77. https://doi.org/10.1080/01944360802558424
  42. Rod, M., & Rod, G. (2020). Reviewing Effectuation and Bricolage in the Context of Social Entrepreneurship Multisector Collaborations. International Journal of Business and Management Research, 8(3), 52-63. https://doi.org/10.37391/IJBMR.080301
  43. Rodrigues, M., & Franco, M. (2021). Digital entrepreneurship in local government: Case study in Municipality of Fundão, Portugal. Sustainable Cities and Society, 73, 103115. https://doi.org/10.1016/j.scs.2021.103115
  44. Sarasvathy, S.D. (2006). Effectuation. Cheltenham: Edward Elgar Publishing.
  45. Sarasvathy, S.D. (2008). Effectuation: Elements of entrepreneurial expertise. [In] S.D. Sarasvathy (Ed.) Effectuation. Cheltenham: Edward Elgar Publishing.
  46. Satoła, Ł. (2014). The impact of the tax policy of municipalities on the level of entrepreneurship (on the example of real estate tax). Social Inequalities and Economic Growth, 40, 238-247.
  47. SCC. (2018). Supporting entrepreneurship by communes. Supreme Chamber of Control. KAP.430.018.2017, No. 201/2017/P/17/004/KAP Retrieved from https://www.nik.gov.pl/plik/id,17394,vp,19963.pdf on December 5, 2022.
  48. Simeoni, F., & Testa, F. (2018). Unconventional Entrepreneurship and the Municipality: The Role of Passion and Competences. [In] S. Cubico, G. Favretto, J. Leitão, & U. Cantner, (Eds.) Entrepreneurship and the Industry Life Cycle. Studies on Entrepreneurship, Structural Change and Industrial Dynamics (pp. 341-358). Springer, Cham. https://doi.org/10.1007/978-3-319-89336-5_16
  49. Skica, T., & Rodzinka, J. (2021). Local government policy towards the financial instruments supporting entrepreneurship. Entrepreneurial Business and Economics Review, 9, 135–147. https://doi.org/10.15678/EBER.2021.090309
  50. Skica, T., & Rodzinka, J. (Eds.). (2020). Instrumentalization of entrepreneurship support in Poland, Estonia and Slovakia: Local government, central administration and public institutions. London: Scientific Publishing House IVG.
  51. Srinivas, H. (2022). The Role of Local Governments in Fostering Business Partnerships for Environmental Sustainability. GDRC Research Output E-076. Retrieved from https://www.gdrc.org/sustbiz/bizpartnerships.html on January 22, 2022.
  52. Szmit, A., Szmit, M., & Lisiak-Felicka, D. (2017). Survival studies of companies established as part of projects implemented under the Human Capital Operational Program An empirical study for the Incubator Foundation. Lodz: Lodz University of Technology Publishing House.
  53. Thekiso, L.E. (2016). The role of local government in supporting entrepreneurship and SMME development: The case of Mangaung Metropolitan Municipality. Retrieved from http://scholar.ufs.ac.za/xmlui/handle/11660/4800 on March 3, 2022.
  54. Thurik, A.R. (2008). Entrepreneurship, Economic Growth and Policy in Emerging Economies. ERIM Report Series Research in Management (ERS-2008-060-ORG; ERIM Report Series Research in Management). Retrieved from https://ideas.repec.org/p/ems/eureri/13318.html on March 3, 2022.
  55. van Geenhuizen, M., & Nijkamp, P. (2009). Place-bound versus footloose firms: wiring metropolitan areas in a policy context. The Annals of Regional Science, 43, 879-896. https://doi.org/10.1007/s00168-009-0298-3
  56. Vesala, H., & Vesala, K. (2010). Entrepreneurs and producers: Identities of Finnish farmers in 2001 and 2006. Journal of Rural Studies, 26(1), 21–30. https://doi.org/10.1016/j.jrurstud.2009.06.001
  57. Westhead, P. (1988). New manufacturing firms and new firm founders in rural and urban areas in Wales: are they really different? SWP 30/88, 1-30.
  58. Young, C., & Kaczmarek, S. (2000). Local government, local economic development and quality of life in Poland. GeoJournal, 50, 225-234. Retrieved from https://www.jstor.org/stable/41147472 on October 5, 2022.

Downloads

Download data is not yet available.