The Relationship between Entrepreneurial Activities, National and Regional Development and Firm Efficiency—Global Entrepreneurship Monitor (GEM)-based Evidence from Croatia

Abstract

This study analyses the dynamics, structure and connections between entrepreneurial activity, economic development and firm efficiency. While the usual presumption on the relationship between these variables implies straightforward, linear and positive impacts, empirical evidence shows that those impacts are significant, more complex and less straightforward. The evidence of entrepreneurial activity in Croatia shows that the early stages of entrepreneurship development are very dynamic and volatile. Furthermore, significant inter-regional differences exist in entrepreneurial activity, firm performance and economic development across six Croatian regions. Correlations between entrepreneurial activity, firm performance and economic development are significant but depend on whether the entrepreneurial activity is opportunity or necessity based. This study confirms the theoretical presumption about complex and multilayered connections between different types of entrepreneurship activity and economic development.