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Financial Sector Development, Openness, and Entrepreneurship: Panel Regression Analysis

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  • Yilmaz Bayar

    (Faculty of Economics and Administrative Sciences, Usak University, Usak 64100, Turkey)

  • Marius Dan Gavriletea

    (Faculty of Business, Department of Business, Babeş-Bolyai University, Cluj-Napoca 400084, Romania)

  • Zeki Ucar

    (Faculty of Economics and Administrative Sciences, Bitlis Eren University, Bitlis 13100, Turkey)

Abstract

Entrepreneurship plays a major role in all countries’ economies through generating new jobs and innovation, and in turn making a contribution to the economic growth. Therefore, the determinants underlying entrepreneurship have become important for designing an environment that increases entrepreneurial activity. In this study, we considered it important to investigate the influence of factors such as financial sector development, foreign direct investment (FDI) inflows, and trade and financial openness on entrepreneurship, using information from 15 upper middle income and high-income countries over the 2001–2015 period. The findings reveal that the banking sector and capital market development, FDI inflows, and trade openness affect the total early-stage entrepreneurial activity positively. Furthermore, the crises had a negative impact on the entrepreneurship.

Suggested Citation

  • Yilmaz Bayar & Marius Dan Gavriletea & Zeki Ucar, 2018. "Financial Sector Development, Openness, and Entrepreneurship: Panel Regression Analysis," Sustainability, MDPI, vol. 10(10), pages 1-11, September.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3493-:d:172808
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    1. Hong, Sanghyun & Robert Reed, W. & Tian, Bifei & Wu, Tingting & Chen, Gen, 2021. "Does FDI promote entrepreneurial activities? A meta-analysis," World Development, Elsevier, vol. 142(C).
    2. Chun Jiang & Amei Feng & Chunhuan Xiao, 2021. "Does Capital Account Liberalization Spur Entrepreneurship: The Role of Financial Development," Sustainability, MDPI, vol. 13(16), pages 1-19, August.
    3. Okuyan Hasan Aydın, 2022. "The Nexus of Financial Development and Economic Growth Across Developing Economies," South East European Journal of Economics and Business, Sciendo, vol. 17(1), pages 125-140, June.
    4. Chun Jiang & Xiaoxin Ma, 2019. "The Impact of Financial Development on Carbon Emissions: A Global Perspective," Sustainability, MDPI, vol. 11(19), pages 1-22, September.
    5. Peter Nderitu GITHAIGA, 2019. "Foreign Remittances, Private Sector Investment and Banking Sector Development," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 3(2), pages 85-112.
    6. Kamalu, Kabiru & Wan Ibrahim, Wan Hakimah, 2022. "The Influence of Institutional Quality on Human Development: Evidence from Developing Countries," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(1), pages 93-105.
    7. Aleksandra Gawel & Timo Toikko, 2021. "Trust in European Institutions in Explaining the Entrepreneurship in European Union Countries," Social Sciences, MDPI, vol. 10(6), pages 1-16, May.
    8. Yuyuan Yu & Muhammad Qayyum, 2023. "Impacts of financial openness on economic complexity: Cross‐country evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1514-1526, April.

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