Starting New Business and Access to Finance: A Panel Data Investigation

Valentina Rusu and Angela Roman

A chapter in Economic Development and Financial Markets, 2020, pp 117-131 from Springer

Abstract: Abstract The objective of our paper is to investigate how the access to finance affects the creation of new business in EU, by identifying the relationship between several indicators, measuring the access to finance, the specifics of business environment, and the dynamics of new business creation. Our analysis includes ten indicators and it is covering the period from 2007 to 2016. We use a fixed effect model on panel data for 18 EU countries. The dependent variable is the nascent entrepreneurship rate, which we use as a proxy for the creation of new business. As independent variables, we use indicators expressing the availability of financial resources and measuring the specifics of business environment. We considered also several control variables. Our results highlight that starting new business in EU countries is significantly linked to easy access to finance. Thus, the creation of new business is encouraged when it is easier to obtain financial resources. Also, the characteristics of business environment are indirectly affecting the creation of new business. Our study contributes to completing the literature in the field by providing empirical evidence regarding the effects of access to finance to the start of new business in the EU.

Keywords: Nascent entrepreneurship; Financial constraints; Venture capital; Equity market; Panel data (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-32426-1_7

Ordering information: This item can be ordered from
http://www.springer.com/9783030324261

DOI: 10.1007/978-3-030-32426-1_7

Access Statistics for this chapter

More chapters in Contributions to Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().