Regional development instruments for promotion of entrepreneurship in territories with unfavorable socio-economic situation: the case of the Latvia

The development gap between regions and even countries has always been actual problem in field of regional policy. Regional development disparities especially are important problem in territories with unfavourable socio-economic situation. To minimize this problem, many Eastern Europe countries, including Latvia, implemented special economic zones and free ports as regional development instrument with aim to mitigate regional development differences between regions by attracting investments and creating new jobs. Experience with special economic zones in Latvia are likely close with Poland’s case, thus experts from Poland affirms that, every 100 jobs given in special economic zone create on average about 72 jobs outside the special economic zone hosting territory and 137 jobs in neighboring counties. Latvia, since the restoration of sovereignty, established five economic zones in total – two of them are situated in Latgale, which is the least developed region of Latvia. Researchers have not been widely contributed to analysis of special economic zones impact to regional development. Authors evaluated impact of created job places of special economic zones in Latgale region to unemployment level. Results of research show that special economic zones as regional development instrument creates significant impact to regional development in territories with unfavourable socio-economic situation