DETERMINANTS OF REGIONAL VARIATION IN NEW FIRM FORMATION: BULGARIAN EXPERIENCE IN EU ACCESSION PERIOD

Regional characteristics appear to be influential on the formation of business start-ups and provide better insights to designing effective policies toward local development. It was in large extent valid for Bulgaria during the process of EU integration. This paper identifies the effects of some regional determinants contributing to new firm formation in 28 Bulgarian districts. The empirical model includes six regional determinants: population density, natural increase rate, firms' density, wage level, unemployment rate, and FDI level. The study estimates their effects through a multiple linear regression model using official data for two cross-sections in years 1999 and 2005.