Exploring Capital and Agglomeration Effects on Entrepreneurship

This paper aims at identifying the factors influencing the entrepreneurial activity level in Polish municipalities, paying attention to agglomeration, human capital, tourism, and social capital effects. The justification for this study is to determine how these factors affect the number of registered firms, especially in view of the fact that the culture of entrepreneurship is not evenly spread across the municipalities. The linear regression model is developed and tested for the data obtained from the Local Data Bank and Google with major focus on the methodological rigor; logarithmic transformation used to enhance fitness; and specification or heteroscedasticity tests. The results demonstrate that the higher levels of human capital and municipal location in the agglomerations increase the number of entrepreneurs, but the role of the human capital is significant (0.48% of increase in the creation of firms in 1% of higher education). Social capital also exerts a positive influence on the level of entrepreneurship by 0.07% for each percentage increase in this factor, while the influence of tourism is relatively low at 0.02% for each percentage increase in this variable. These related factors reveal some anomalies like the municipalities with negative values from tourism and educational centers. The study contributes a wealth of knowledge regarding the patterns of entrepreneurship within different regions and underpins the significance of human capital, social capital and agglomeration in driving the economy.