The Perception of Entrepreneurial Climate in the Republic of Croatia

Abstract

One of the most important roles of the government is to provide a positive entrepreneurial climate that allows clearly defined market conditions, thus attracting entrepreneurs (Vehovec, 2002). By focusing on the characteristics important for entrepreneurial growth, governments can develop policies and programs in a targeted manner to help entrepreneurs. In order to examine the entrepreneurial climate in the Republic of Croatia, the Entrepreneurial Climate Questionnaire was completed by 761 leaders from various Croatian companies. The three-factor structure of the entrepreneurial climate was obtained. The first factor, described as the strategic postulates of the country and their impact on the market (clarity of the vision of development and the vitality of the country systems that support it, such as science, education, legislation, financial strategy and justice), the respondents estimated as very unfavorable for successful business development in Croatia. The second factor, described as the behavior of the country on an operational level (public administration services), respondents rated somewhat more favorable than the first factor, though still far from optimal. The third factor, described as the country’s impact on competition, was also assessed by the respondents as unfavorable (primarily, they are dissatisfied with the high level of corruption, numerous public administrations demands, unregulated grey labor market and high prices of the financial services). Significant differences in estimates with respect to the form of ownership have been established, e.g. the state-owned companies estimated the entrepreneurial climate as the most favorable, private foreign companies as less favorable, and private domestic companies estimated it as the most unfavorable. At this point, it seems that the Republic of Croatia does not stimulate, instead, it is a major obstacle to the serious development of entrepreneurial climate and competitiveness. The results show that the situation could easily change with clear strategic guidelines and determination to make changes.

Keywords: entrepreneurial climate, competitiveness, state strategies, public companies, private companies

JEL Classification: L26