Personal, household and business environmental determinants of entrepreneurship

The purpose of this paper is to explore personal, household and business environmental influences on entrepreneurship in Kosova.

The approach takes the form of a econometric investigation using a binary choice model based on a nationally representative labour force and household survey conducted by Riinvest Institute at the end of 2002.

The results suggest that males, those who live in urban areas, belonging to a larger family/household, have a higher likelihood of being involved in entrepreneurial activities, while a weak positive effect of age and no significant effect of marital status are found. Self‐employed were more likely to be found in sectors where start‐up and sunk costs are expected to be lower (such as services and trade), those sectors that experienced high growth (construction) and in the regions in which entrepreneurship is more developed. In contrast with previous studies, it is found that education received household remittances and the presence of an additional wage earner in a household have negative impact on entrepreneurial activities arising from country‐specific features.

These empirical findings identified determinants influencing entrepreneurial activities providing basis for policy discussion aimed at entrepreneurship development in the country.

The paper complements rather scarce empirical evidence on determinants of entrepreneurship from a unique transition country. It highlights the role of some transition and country‐specific factors in entrepreneurial activity of the population, providing better insights in understanding entrepreneurial behaviour of people in general and in transition economies in particular.