Determinants of new business formation – some lessons from the Czech Republic

Abstract

This paper concerns with determinants of new business formation. The determinants are related to relevant theoretical concepts dealing with the issue. The Czech Republic in the time period 2011-2012 is the area of interest. Spatial approach is used to identify the impact of the determinants on new business formation. Thus, the data are related to 206 Czech microregions. The methods of regression analysis are employed to gain results. These show the positive impact of agglomeration economies and the quality of entrepreneurial climate on new business formation. Moreover, human capital and the presence of foreign-owned businesses positively influence new business formation. On the contrary, the relationship between unemployment and new business formation is ambivalent. Altogether, the findings support path-dependency of new business formation with important implications for entrepreneurship policy. Finally, regression results point out the relevance of spatial spillovers in explaining variation in new business formation. © 2015, Economics and Sociology. All rights reserved.