THE ROLE OF SMALL BUSINESS IN REGIONAL POVERTY REDUCTION
DOI:
https://doi.org/10.47390/SPR1342V4I11Y2024N21Keywords:
Poverty, Small business, GDP, employment, unemployment.Abstract
This study examines factors influencing regional poverty rates using correlation-regression analysis. The main goal is to study the impact of small business development on poverty reduction in the region. Data from 2010 to 2022 were analyzed, focusing on the following key factors: small business employment, small business share of gross domestic product (GDP), and per capita income. A multivariate econometric model shows that a 1% increase in small business employment is associated with a 2.81% reduction in regional poverty on average. In addition, a 1 percent increase in the share of small businesses in GNP leads to a 3.75 percent reduction in poverty, and a 1 percent increase in per capita income reduces poverty by 1.34 percent. The model explains 85.8% of the variation in the poverty rate, with statistical evidence confirming its reliability for future forecasting. This study provides valuable insights for policy makers focusing on small business development as a strategic tool for poverty alleviation.
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