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

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  • Sorin Gabriel Anton

    (Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Carol I Avenue, No. 11, 700506 Iaşi, Romania)

  • Ionel Bostan

    (Faculty of Law and Administrative Sciences, Stefan cel Mare University of Suceava, Str. Universitatii 13, 720229 Suceava, Romania)

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.

Suggested Citation

  • Sorin Gabriel Anton & Ionel Bostan, 2017. "The Role of Access to Finance in Explaining Cross-National Variation in Entrepreneurial Activity: A Panel Data Approach," Sustainability, MDPI, vol. 9(11), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:11:p:1947-:d:116831
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    15. ARTENE, Alin, 2018. "Focusing economic research on the issues of sustainability and environmental protection," SocArXiv jc6f5, Center for Open Science.
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    18. Ana Iolanda Vodă & Gina Ionela Butnaru & Rodica Cristina Butnaru, 2020. "Enablers of Entrepreneurial Activity across the European Union—An Analysis Using GEM Individual Data," Sustainability, MDPI, vol. 12(3), pages 1-28, January.
    19. Roxana Manuela Dicu & Ioan-Bogdan Robu & George-Marian Aevoae & Daniela-Neonila Mardiros, 2020. "Rethinking the Role of M&As in Promoting Sustainable Development: Empirical Evidence Regarding the Relation Between the Audit Opinion and the Sustainable Performance of the Romanian Target Companies," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    20. Yinghui Chen & Xiaolin Gong & Chien-Chi Chu & Yang Cao, 2018. "Access to the Internet and Access to Finance: Theory and Evidence," Sustainability, MDPI, vol. 10(7), pages 1-38, July.
    21. Carmen Păunescu & Mihaela Cornelia Popescu & Matthias Duennweber, 2018. "Factors Determining Desirability of Entrepreneurship in Romania," Sustainability, MDPI, vol. 10(11), pages 1-22, October.
    22. Aurel Burciu & Rozalia Kicsi & Ionel Bostan, 2020. "Social Trust and Dynamics of Capitalist Economies in the Context of Clashing Managerial Factors with Risks and Severe Turbulence: A Conceptual Inquiry," Sustainability, MDPI, vol. 12(21), pages 1-28, October.

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