Local subsidies represent one of the key instruments of economic policy used by local governments to encourage self-employment and the development of entrepreneurship, especially in conditions of economic uncertainty. The subject of this paper is the analysis of the impact of local subsidies on the development of sole proprietorship businesses in the city of Bijeljina. The aim of the paper is to examine the extent to which local subsidies contribute to the establishment, survival, and stability of sole proprietorship businesses, as well as to identify the main challenges entrepreneurs face after using this type of support. The paper is based on the assumption that local subsidies have a positive, but temporally and structurally limited, impact on the development of sole proprietorship businesses. The research is designed as an empirical analysis, based on available data from the local government and relevant business performance indicators of subsidized businesses. The results of the paper can serve as a basis for improving local support measures for self-employment and for creating more efficient policies aimed at the sustainable development of entrepreneurship at the local level.

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