Higher education and digitalization as drivers of entrepreneurship in Central and Eastern Europe

Abstract This study investigates the determinants of entrepreneurial activity in Central and Eastern Europe (CEE), focusing on the transition toward innovation-driven economies. Utilizing a balanced panel dataset comprising 11 EU member states, the research analyzes the impact of human capital and digital infrastructure on new business formation. The empirical strategy employs a panel data regression framework, adopting the random effects estimator as the appropriate specification based on the Hausman test results. The findings reveal that structural factors are the primary drivers of entrepreneurship in the region. Tertiary education and digitalization exhibit a positive and statistically significant impact on new business density. In contrast, short-term economic growth (gross domestic product per capita) did not exhibit a statistically significant impact, suggesting that entrepreneurial dynamics in the CEE region are becoming less cyclical and increasingly contingent upon structural determinants.