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Determinants of profitability of Polish rural micro-enterprises

Author

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  • Janda, Karel
  • Strielkowski, Wadim
  • Rausser, Gordon

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.

Suggested Citation

  • Janda, Karel & Strielkowski, Wadim & Rausser, Gordon, 2013. "Determinants of profitability of Polish rural micro-enterprises," MPRA Paper 52771, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52771
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    File URL: https://mpra.ub.uni-muenchen.de/52771/1/MPRA_paper_52771.pdf
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    References listed on IDEAS

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    3. de Mel, Suresh & McKenzie, David J. & Woodruff, Christopher, 2009. "Measuring microenterprise profits: Must we ask how the sausage is made?," Journal of Development Economics, Elsevier, vol. 88(1), pages 19-31, January.
    4. Lars Ivar Oppedal Berge & Kjetil Bjorvatn & Bertil Tungodden, 2015. "Human and Financial Capital for Microenterprise Development: Evidence from a Field and Lab Experiment," Management Science, INFORMS, vol. 61(4), pages 707-722, April.
    5. Schreiner, Mark & Woller, Gary, 2003. "Microenterprise Development Programs in the United States and in the Developing World," World Development, Elsevier, vol. 31(9), pages 1567-1580, September.
    6. Mano, Yukichi & Iddrisu, Alhassan & Yoshino, Yutaka & Sonobe, Tetsushi, 2012. "How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? The Impacts of Experimental Basic Managerial Training," World Development, Elsevier, vol. 40(3), pages 458-468.
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    Cited by:

    1. Vyacheslav Volchik & Liudmila Klimenko & Oxana Posukhova, 2018. "Socio-economic sustainable development and the precariat: a case study of three Russian cities," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(1), pages 411-428, September.
    2. Sadananda Prusty & Anubha & Saurabh Gupta, 2021. "On the Road to Recovery: The Role of Post-Lockdown Stimulus Package," FIIB Business Review, , vol. 11(2), pages 206-224, June.
    3. José Niño-Amézquita & Fedor Legotin & Oleg Barbakov, 2017. "Economic success and sustainability in pharmaceutical sector: a case of Indian SMEs," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(1), pages 157-168, September.
    4. José Niño-Amézquita & Fedor Legotin & Oleg Barbakov, 2017. "Economic success and sustainability in pharmaceutical sector: a case of Indian SMEs," Post-Print hal-01735846, HAL.
    5. Petra Koudelková, 2014. "Innovation in Small and Medium Enterprises in the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2014(3), pages 31-37.
    6. Ivana Blazkova, & Ondrej Dvoulety, 2017. "Is the price-cost margin affected by the market concentration? Evidence from the Czech food and beverages industry," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(2), pages 256-269, May.
    7. Pramod K Singh & Harpalsinh Chudasama, 2020. "Evaluating poverty alleviation strategies in a developing country," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-23, January.

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    More about this item

    Keywords

    micro-enterprises; rural development; transition economies; EU Accession; linear regression model;
    All these keywords.

    JEL classification:

    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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