Determinants and Economic Effects of New Firm Creation: Evidence from Polish Regions

Abstract

This article studies firm entry dynamics in Poland—an emerging Central and Eastern European (CEE) economy with significant regional disparities. In particular, it examines both long- and short-run drivers of new firm creation in the Polish NUTS-2 regions and the role of firm entries for the region’s economic activity by investigating the propagation of shocks to firm entry on regional GDP, nonagricultural employment, and the total number of firms. Results indicate that regional economic structures significantly affect new firm creation. Some important results are also obtained with regard to the role of firm entry in regional development patterns in Poland.