Determinants of firm entries: empirical evidence for Slovenia

Abstract

We empirically investigate the determinants of new firm formations on Slovenian data set for the 6-year period across statistical regions. Analyzed are the relationships of the determinants classified into five groups: demand, unemployment, industrial restructuring, local financial capital, and knowledge concentration. We find a positive and significant impact of GDP p.c., unemployment rate, productivity growth and a negative relationship for employment density. Results show that some regions have significantly worse conditions for start-up firms than others. Practical implications of this study would allow policy makers to better understand the dynamics in new firm formations.