What is the relationship between entrepreneurship and unemployment in visegrad countries?

Abstract

The presented study aims to quantify the determinants of entrepreneurship in the four countries of the Visegrad (V4) group (the Czech Republic, Hungary, Poland and Slovakia) with a particular focus on the relationship between entrepreneurship and unemployment. The purpose of the research was to analyze whether, during the periods of higher unemployment rate, individuals more likely engage into entrepreneurial activity. Data were collected from the national statistical offices of the Visegrad countries, World Bank, Eurostat and Heritage Foundation. The collected sample covered years 1998-2015. To achieve the main objective of the article, regression models with the dependent variable, the rate of registered businesses per economically active inhabitant, were quantified. Estimated regressions proved a positive relationship between entrepreneurship and unemployment. A higher unemployment rate was associated with the increase in overall entrepreneurial activity. Estimated models further confirmed the negative influence of the administrative barriers on the overall entrepreneurial activity. Several policy and research implications are discussed in the study.