Impact assessment of promoting the development of entrepreneurial zones in the Republic of Croatia through the ministry responsible for entrepreneurial infrastructure on economic results in local self-government units - Entrepreneurial zones

Commissioned by: The Ministry of Economy, Entrepreneurship and Crafts
Project manager: Dubravka Jurlina Alibegović
Collaborators: Sunčana Slijepčević, Ivana Rašić Bakarić, Nebojša Stojčić
Project duration: February 13, 2018 – July 13, 2018

Summary:

Project goals were the state analysis and analysis of results of the entrepreneurial zones in the Republic of Croatia based on the granting from the state budget and granting of land in the period from 2004 to 2013, and the assessment of the regulatory framework for the system of entrepreneurial zones in the Republic of Croatia.

The result of the project was a Study which answered the question of the effects of entrepreneurial zones, i.e. the investment of grants from the state budget in the period 2004-2013 to local self-government units with entrepreneurial zones in relation to economic outcomes in local self-government units without entrepreneurial zones, and whether the economic effects of entrepreneurial zones were limited to local self-government units in which they operated or these effects extended to other units of local self-government, primarily neighbouring municipalities and cities. It also questioned whether the entrepreneurial zones created spatial patterns of economic activity. The study addressed the question of the link between the effects of granting and granting of lands for the establishment or expansion of entrepreneurial zones with allocations from local budgets and assessed the regulatory framework for the system of entrepreneurial zones in the Republic of Croatia.

This research (i) examined the effects of entrepreneurial zones in the Republic of Croatia through grants awarded from the state budget from 2004 to 2013 through the ministry responsible for entrepreneurial infrastructure on the economic results of local self-government units with entrepreneurial zones in relation to economic results in local self-government units without entrepreneurial zones, (ii) analyzed the effects of the grant integration allocated from the state budget from 2004 to 2013 through the ministry responsible for entrepreneurial infrastructure and grant of lands donation owned by the Republic of Croatia for the establishment or expansion of entrepreneurial zones with the budget allocations of the local self-government units according to the functional classification of expenditures for the economic, utility and infrastructure costs of local self-government units, (iii) evaluated the regulatory framework for the system of entrepreneurial zones in the Republic of Croatia.

The research used a quantitative analysis method that allowed an assessment of the effect or the so-called treatment within the population - local self-government units. This methodology made it possible to estimate the intensity of entrepreneurial zones' effects on economic outcomes. In the large number of economic outcomes, the focus was on the indicators of business sector output, employment, average level of salary and the intensity of entrepreneurial activity which was defined as the relationship between newly established and excluded enterprises within local self-government units. Spatial econometric analysis techniques were used to test the economic impacts of entrepreneurial zones on the local self-government unit, as well as on other local self-government units in the Republic of Croatia, with emphasis placed on neighbouring local self-government units. The same indicators of economic effects were used in this part of the research. The research analyzed whether entrepreneurial zones lead to concentration of economic activity (business entities) within their local self-government units and counties, and whether the spatial forms of economic structure (e.g. concentration of enterprises from a particular economic activity/industry) are generated as a result of the activity of entrepreneurial zones.