Transformations  in
Business & Economics

THE ROLE OF ENTREPRENEURSHIP IN THE DEVELOPMENT OF LOCAL SELF-GOVERNMENTS IN MONTENEGRO
Nikola Milovic, Mijat Jocovic, Vladimir Djurisic

ABSTRACT. The promotion of entrepreneurship as a significant factor of economic development in Montenegro has been particularly strong in the last ten years. Regardless of its role and contribution, there have been no studies in Montenegro to objectively determine the impact of entrepreneurship on economic development. In this regard, the aim of this paper is to examine the impact of entrepreneurship on the development of local self-governments in Montenegro. To examine the nature of the relationship between the development of entrepreneurship and the economic development of municipalities, we applied dynamic panel models on the data collected for the period 2009-2017. The results revealed significant differences in the development level among municipalities, regardless of a uniform national entrepreneurship development strategy. Additionally, it's important to mention that it was shown that entrepreneurship influences the increase in employment and the budget of municipalities as well as the population growth at the local level.

KEYWORDS:  entrepreneurship, economic development, local communities, dynamic panel, Montenegro.

JEL classification:  O18, H20, M13.