Immigrant Entrepreneurship in Croatia : Exploring Its Potential, (Rising) Barriers and Integration Patterns

Croatia is now facing a large emigration wave and a growing need of work force and entrepreneurial activity. Yet, only 11% of Croatian citizens see immigration more of an opportunity than a problem (EC, 2018). Studies conducted globally show the immigrants to be more entrepreneurial, less risk-averse and more innovative than the local citizens. Consequently, they contribute to the competitiveness of their host country and the well-being of its entire population. The preliminary findings based on semi-structured interviews and limited statistical data suggest growing potential of immigrant entrepreneurship in Croatia, but also persistent barriers connected both with formal and informal institutions. The formal institutions-related barriers are divided into two groups. The first one includes barriers that are equally important and harmful to domestic and foreign entrepreneurs like administrative burden, unpredictable tax regulations and overly strict employment regulations. The second group consists of the formal rules presenting obstacles specific to immigrant entrepreneurs like the lack of clear instructions and requirements for doing business for foreigners (in the public administration bodies) coupled with inadequate enforcement of the existing rules. In addition, the non-EU nationals continuously face the work permit problems. Yet, the informal institutions often present even bigger obstacle for the entrepreneurs from the less developed countries. The ignorance combined with very limited openness towards other ethnic groups discourages their entrepreneurial initiatives. This attitude mostly changes once the immigrant is accepted as an in-group member in the host society.Besides a coherent overview of the immigrant entrepreneurship in Croatia, this study provides policy recommendations aimed at using its full potential