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Financing of Entrepreneurial Firms in Canada: Some Patterns

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  • Anton Miglo

    (Department of Accounting, Finance and Economics, Birmingham City University, Birmingham B4 7BD, UK)

Abstract

This article analyzes the patterns of financing for entrepreneurial firms in Canada. We compare the predictions of major theories of entrepreneurial finance and some more recent ideas (e.g., crowdfunding-related ideas/theories) with empirical evidence. Regression and correlation analyses were used to analyze the connections between firms’ financing choices (e.g., debt/equity ratio) and different variables such as firm age, firm owner origin, and the fraction of intangibles assets. We found strong evidence that the financing choices of entrepreneurial firms in Canada are consistent with flexibility theory and credit rationing theory. We did not find evidence that taxes play a significant role in explaining these choices. We also found that the likelihood of using crowdfunding is consistent with local bias ideas and internet access. We also provide an overview of literature related to entrepreneurial financing in Canada and discuss its major challenges and directions for future research.

Suggested Citation

  • Anton Miglo, 2020. "Financing of Entrepreneurial Firms in Canada: Some Patterns," Administrative Sciences, MDPI, vol. 10(3), pages 1-27, August.
    • Handle: RePEc:gam:jadmsc:v:10:y:2020:i:3:p:50-:d:395181
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    Cited by:

    1. Anton Miglo & Victor Miglo, 2019. "Market imperfections and crowdfunding," Small Business Economics, Springer, vol. 53(1), pages 51-79, June.
    2. Agnieszka Szewczyk & Zbigniew Stempnakowski, 2021. "Social Energy as the Driving Force behind Crowdfunding—Analysis and Classification of Selected Attributes," Energies, MDPI, vol. 14(19), pages 1-32, September.
    3. Miglo, Anton, 2022. "Theories of financing for entrepreneurial firms: a review," MPRA Paper 115835, University Library of Munich, Germany.
    4. Anton Miglo, 2020. "Zero-Debt Policy under Asymmetric Information, Flexibility and Free Cash Flow Considerations," JRFM, MDPI, vol. 13(12), pages 1-25, November.
    5. Miglo Anton, 2021. "Crowdfunding Under Market Feedback, Asymmetric Information And Overconfident Entrepreneur," Entrepreneurship Research Journal, De Gruyter, vol. 11(4), pages 1-19, October.
    6. Hui He & Yan Bai & Xia Xiao, 2020. "How Past Failure Predicts Subsequent Entrepreneurial Intention: A Comparative Study of Mainland China and Taiwan," Sustainability, MDPI, vol. 12(6), pages 1-17, March.

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