The Role of Access to Finance in Explaining Cross-National Variation in Entrepreneurial Activity: A Panel Data Approach

Abstract

Abstract:The aim of the paper is to investigate to what extent access to finance explains differences in entrepreneurial activity across European Union (EU) member countries. We use a dataset containing information across countries and time to investigate the determinants of entrepreneurial activity in twenty-five EU members over the period between 2007 and 2013. Our sample comprises both periods of difficult access to finance and periods of excessive liquidities. Employing a panel data model with fixed effects, we found a positive relationship between access to finance and entrepreneurial activities. Furthermore, we showed that this positive relationship is more important for the individuals who believe they have the required skills and knowledge to start a business. The results proved to be robust when we employed different measures of entrepreneurial activity and several proxies for access to finance. Our findings provide empirical evidence for the need of policy initiatives at national and EU level to facilitate the creation of sustainable new ventures.

Enablers of Entrepreneurial Activity across the European Union—An Analysis Using GEM Individual Data

“…In the same study, the authors state that in less developed countries with generally necessity-based economies, entrepreneurial activity varies according to the level of economic development (it decreases when the economy is dominated by the manufacturing industry, and increases when it is dominated by the service sector-innovation driven phase), which means that different factor combinations can affect the entrepreneurial activity.Based on this theoretical background, the aim of this study is to focus on the psychological perspective through perceptual factors, and to analyse the role of entrepreneurial attributes as main determinants which explain early-stage entrepreneurial activity during, and after, the recent economic and financial crisis. To achieve this goal, we focused on the influence of four main entrepreneurial attributes on the propensity to engage in TEA, namely: Capability of identifying opportunity; having the skills, knowledge and experience to start up a business or businesses; fear of failure; and knowing other entrepreneurs [17]. However, given the fact that the entrepreneurial activity determinants are sensitive to time and a country's GDP [5,18,19], the study examines two different moments in time, namely 2007 and 2014, in order to capture the fluctuations in entrepreneurial activities, and the effects of different perceptual factors, in less and high developed European member states.Although, the specific body of research offers a long list of variables influencing the entrepreneurial activities, some studies offer mixed results.…”

“…Based on this theoretical background, the aim of this study is to focus on the psychological perspective through perceptual factors, and to analyse the role of entrepreneurial attributes as main determinants which explain early-stage entrepreneurial activity during, and after, the recent economic and financial crisis. To achieve this goal, we focused on the influence of four main entrepreneurial attributes on the propensity to engage in TEA, namely: Capability of identifying opportunity; having the skills, knowledge and experience to start up a business or businesses; fear of failure; and knowing other entrepreneurs [17]. However, given the fact that the entrepreneurial activity determinants are sensitive to time and a country's GDP [5,18,19], the study examines two different moments in time, namely 2007 and 2014, in order to capture the fluctuations in entrepreneurial activities, and the effects of different perceptual factors, in less and high developed European member states.…”

Access to the Internet and Access to Finance: Theory and Evidence

“…Our paper, therefore, contributes to the growing literature on Internet finance as well as the broader literature on crowdfunding. Recent investigations include [10][11][12]14,15,[17][18][19][20][21][22][23][24][25][26][27]. Given that the explosive penetration of the Internet and Mobile Internet that has laid a sound foundation in China, which has been rapidly skyrocketing (China has greater Internet and mobile Internet development among emerging market economies with penetration ratios of 45% and 37.1%, respectively, in 2013, reported by Lei [19]), our study has important and timely implications not only for academics and practitioners, but for policy makers as well.…”

Nonlinear Effect of Financial Efficiency and Financial Competition on Heterogeneous Firm R&D: A Study on the Combined Perspective of Financial Quantity Expansion and Quality Development

“…Table 1 reports the descriptive statistical analysis of the variables. To mitigate the effects of outliers, in Table 1 and in the following analysis, we use the winsorization method for all variables to eliminate extreme values at the 1% and 99% levels [36]. …”