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ENTREPRENEURIAL ACTIVITIES IN ROMANIA

Lafuente, E., Driga, O. (2007). 1st Report on Entrepreneurial Activities in Romania. Centre for Entrepreneurship & Business Research. CEBR working paper series WP 01/2007.

Summary:

Entrepreneurship is no longer an abstract concept. There is increasing demand and interest in placing ‘Entrepreneurship’ (new business formation) as a key element within the development and revitalisation process of lagging European areas. Furthermore, the growing awareness over the last decades of the importance of new enterprises and small and medium sized enterprises (SME’s) within economic development has led many public administrations from all political ideologies and of all administrative levels to develop policy favouring and stimulating the creation of new enterprises.

Entrepreneurial activity has also attracted the interest of many academic researchers who have demonstrated that increase levels of entrepreneurial activity can have positive repercussions on employment generation and on economic growth.

The aforementioned arguments represent the motivations of the Centre for Entrepreneurship & Business Research (CEBR) to create this first report. More specifically, the main objective of this document is to inform about the entrepreneurial activities in Romania. Using a sample collected by the Centre for Entrepreneurship & Business Research (CEBR) for the year 2006 that includes 1,449 Romanian individuals, this document aims to present and identify the demographic and socio-cultural factors as well as the motivations of those individuals involved in entrepreneurial activities, in order to offer a broader view in what concerns the characteristics and motivators of potential and recent entrepreneurs in Romania.

The results emerging from this first report indicate that women are more involved in pre start-up entrepreneurial activities (9.58%), whereas men show a slightly higher rate of recent business creation (16.75%). We also observe that mean age to be involved in entrepreneurial activities is between 33 and 35 years old. However, we notice that individuals between 36 and 50 years old are more actively involved in pre start-up entrepreneurial activities (9.40%). In the case of recent entrepreneurs, the highest rate of new business creation is found for individuals between 26 and 40 years old (18.14%).

Furthermore, our results highlight the importance about the presence of entrepreneurs in the individual’s family circle to enhance entrepreneurial activities. We find that 38.60% of individuals involved in pre start-up entrepreneurial activities report the presence of an entrepreneur in their family, being the father the main entrepreneurial referent for these individuals (22.81%). For recent entrepreneurs 20.69% of respondents have an entrepreneur in their family and, as in the case of people involved in pre start-up entrepreneurial activities, the most referred entrepreneurial example within the individual’s family is the father (15.09%).

In what concerns the motivations to be involved in entrepreneurial activities, our results indicate that individuals in our sample have very diverse incentives to become entrepreneurs. Individuals mainly perceive entrepreneurship as an option to take advantage of business opportunities, to improve their quality of life. Interestingly, results indicate that individuals also consider social aspects as important factors that motivate the decision to be involved in entrepreneurial activities.

The findings of this document have important implications for policy-makers. Basically, the conclusions of the study reveal the importance of first identify those factors (either economic or socio-cultural) that incentive individuals towards entrepreneurship before attempting to apply formal measures for the promotion of entrepreneurial activity.

Finally, results from this study encourage us to increase our knowledge about entrepreneurial paths followed by Romanian individuals. More specifically, further research should attempt to evaluate the presence of potential differences in the entrepreneurial activity due to gender considerations (female entrepreneurial activity).

We also propose to enrich our analysis by examining entrepreneurial activity considering the different geographical contexts present in Romania.

Click here for the entire research paper.