Institutional approach and enterprise creation: support systems in the case of cities in rural and peripheral areas of Portugal

Abstract

The research aims to identify and analyse the formal institutional factors in the environment that constrain the creation of industrial enterprises in small city in rural and peripheral areas of Portugal, namely Covilha County. It has as reference sources several approaches about enterprise creation and institutional economic theory due to their adequacy to the study of the factors that influence enterprise creation by encompassing institutions, services, programs and support measures. With this analysis we try to evaluate the extent to which entrepreneurs know about and employ the available institutional programs/services. Investigation hypotheses are formulated and subject them to empiric tests. The results, from the offer point of view of the services/programs, show that, duplication of resources and efforts on the part of institutions in the region often occurs making coordination more difficult and alienating the demand (entrepreneurs). From the view point of the demand, we noticed that entrepreneurs may have a broad awareness of the institutions, but this does not imply that they use their programs and services. Therefore recommendations are made having in view a better coordination among the different institutions involved so that the programs they offer can be more effective in the future.