Determinants of profitability of Polish rural micro-enterprises

Karel Janda, Wadim Strielkowski and Gordon Rausser

MPRA Paper from University Library of Munich, Germany

Abstract: Rural micro-enterprises are an important factor in sustainable rural development in post-transitional Eastern Europe. This paper deals with determining the key factors influencing profitability in rural micro-enterprises in Poland. The research design was based on a questionnaire survey of 300 rural micro-enterprises in food-processing sector in rich and poor Polish provinces. The analysis carried out in this study is centered around the Polish EU accession in May 2004. Similar to other related studies, our results show that EU accession was not perceived as a major change by rural Polish micro-entrepreneurs and that the EU related factors were not significant determinants of their profitability. However, our results also show that the success of the rural food processing micro-enterprise in Eastern Europe is most related to its owner/manager and enterprise characteristics. For owner/manager the most significant determinants are his/her age and risk-taking as the main motive for establishing an enterprise. The enterprise characteristics that determine the profitability include enterprise location within a region with competitive situation, enterprise size (being a sole trader or family enterprise), ICT advancements in enterprise and the fact whether enterprise has any certificates for its products. The results have significant implications for the researches and policy-makers and can become a basis for preparing relevant enterprise support policies in post-transitional Eastern Europe.

Keywords: micro-enterprises; rural development; transition economies; EU Accession; linear regression model (search for similar items in EconPapers)
JEL-codes: P25 Q10 R11 (search for similar items in EconPapers)
Date: 2013-08-01
New Economics Papers: this item is included in nep-agr and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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