Entrepreneurship in the rural areas of Romania. The impact of the 2007-2013 EU funding programmes

Abstract

Abstract This paper contributes to the research on entrepreneurship in rural areas by focusing on the absorption and investment plans developed with European Funds and implemented in Romania in 2007-2013 for rural development. Entrepreneurship in the European Union is seen as the solution for creating and increasing jobs number, developing new business models, and is related very often with creativity and innovation. Moreover, entrepreneurship is directly linked to the economic performance of regions (Audretsch, D.B., Keilbach, M., 2005), poverty reduction and contributes to the economic advancement of rural communities. The focus on rural areas is given by the fact that almost half of the Romanian population lives in villages or communes (around 45%), and the main income source comes from agriculture. In the same time, there is an important potential for entrepreneurial projects because rural areas are high underdeveloped, there is a lack of services in major fields as education, social services, entertainment etc. Also, we find a high potential in tourism, especially in ecological, adventure or agro-tourism. We develop a theoretical framework to discuss the potential impact of EU Funds on rural development, the access to public funds for rural population, their readiness for business ownership, the most accessible fields for starting a business and regional variables. Our study is based on public data and official reports on the European Funds received by Romania in the budgetary period of 2007-2013 and other market data that round the entrepreneurship frame in rural areas. We analyze the number of start-ups financed by European funds, type and size of enterprises, number of jobs and reasons for contract cancellation. We find that regions with a reach cultural heritage and closer to the Western border have registered more applications and are more interested in self-employment, but also that given the administrative barriers many entrepreneurs decided to cancel the contracts.