Can local government impact transaction costs of enterprises?

Abstract

The paper raise the issue of theoretical aspects of local development and transaction costs. The main aim of the paper was to identify investment incentives offered by the local government and to recognize their importance in reducing enterprise transaction costs. The article discuss the findings on the enterprise transaction costs in the relation to the local governments and their potential investment attractiveness. To this end the correlation between potential investemnent attractiveness of local governments and their investment incentives offer was analysed. Authors presented the results of the research conducted in Poland regarding investment incentives offered at the local level. Moreover, a typology of investment incentives (financial and non-financial) offered by the local government, which can result in reducing the enterprise TCs, were pointed out.