Does Self-Employment Foster Regional Economic Performance? Evidence from Four Post-Socialist Countries

Abstract

For 37 regions of four Visegrád Group (V4) countries that used to be part of
the Socialist Bloc, the paper studies the interaction between self-employment (as
a proxy of entrepreneurial capital) and per-capita real gross domestic product (as a measure of economic performance or prosperity). A system of two simultaneous spatial panel data equations is applied to aggregate regional data for a period of 20 years from 2001 to 2020 in order to explore the links between entrepreneurial activity and performance and to identify determinants of this relationship. Mutual positive correlation is found between self-employment and regional economic performance, and a number of regional labor-market, demographic or socio-economic characteristics are identified to be factors of the entrepreneurship-development nexus. Only Hungarian regions deviate from this generally established pattern. The present study complements the research agenda that has been so far pursued exclusively for Western and developing countries.