Determinants of New Companies’ Formation in Romania at Regional Level. A Fixed Effects Model (FEM) Approach

Abstract

This below article will empirically analyse the determinants of new companies’ formation basing on a panel data, covering the period 2010-2019, for 42 counties (including Bucharest municipality) of Romania. An OLS regression equation will be employed with new companies’ formation as dependent variable, and regional GDP, existing entrepreneurship, density of population, immigrants and unemployment rate as independent ones. We estimate the model with cross sections and/or with time fixed and/or random effects and we will also use an LSDV model using dummy variables in order to observe the similarities. Decisions in using a period fixed effect model FEM will be based on Hausman test and redundancy test under Eviews environment. Most of determinants considered will be found significant in their influences on new companies’ formation in Romanian counties.

Keywords

• new companies formation
• entrepreneurship
• fixed effect model
• dummy variables