The impact of significant political factors on starting a new business

Abstract

Small and medium-sized enterprises (SMEs) are an essential part of every country's economic system. The entry of new potential business entities plays an important role in this regard, what is also the focus of the European Commission, which calls for a significant improvement in the conditions for starting a new business. The aim of the paper is to define significant political factors influencing the quality of the business environment and quantify their impact on starting a new business. In regards to the defined aim, a survey-based research was conducted with the enterprises operating in the SME segment in the Czech and the Slovak Republic. The research was done on a sample of 641 respondents. They were business owners and managers active in small and medium-sized enterprises. The respondents had the option to express their agreement using the Likert scale: strongly agree, agree, neutral, disagree and strongly disagree. The results of the research were processed via the method of regression analysis. State regulation and business support has a major impact on the decision to start a business. The second most important factor is the legislative environment and the least significant factor is the state bureaucracy. The evaluation of political factors is quite negative in both countries. Just a small proportion of entrepreneurs in both countries positively evaluated the level of legislation in business and the administrative burden on workforce for businesses. The results of the research show the need to create more appropriate conditions for starting a new business. © Proceedings of the 14th European Conference on Innovation and Entrepreneurship, ECIE 2019. All rights reserved.