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Sustainable investment conditions, venture capital, and new business creation

Author

Listed:
  • Jayaprada Putrevu

    (Abu Dhabi University)

  • Charilaos Mertzanis

    (Abu Dhabi University)

  • Ilias Kampouris

    (Abu Dhabi University)

Abstract

We examine the effects of venture capital availability and sustainable investment conditions on new business registrations in the Middle East and North Africa region during 2003–2020. We employ country-level measures of venture capital availability and sustainable investment conditions based on the degree of market readiness to attract sustainable investments and the proportion of managed assets that qualified for sustainable investment. We distinguish between conventional and Shariah-compliant managed assets. We find a significant and positive correlation between venture capital availability and new business registration. We also find a significant and positive correlation between market preparedness to embrace sustainable investments and new business registrations. Additionally, increases in assets under management, encompassing both conventional and Shariah-compliant assets, eligible for sustainable investments, corresponded higher rates of business registration. However, the influence of assets under management comprised solely of conventional assets exhibited ambiguity. Our results remain robust after applying various sensitivity tests, endogeneity analysis. The analysis contributes to the literature by using a novel measure of sustainable investment conditions and contributing to the scarce literature on alternative finance and entrepreneurial activity in a unique region.

Suggested Citation

  • Jayaprada Putrevu & Charilaos Mertzanis & Ilias Kampouris, 2025. "Sustainable investment conditions, venture capital, and new business creation," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-37, December.
    • Handle: RePEc:spr:intemj:v:21:y:2025:i:1:d:10.1007_s11365-025-01094-5
    DOI: 10.1007/s11365-025-01094-5
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