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Entrepreneurial fintech clusters

Author

Listed:
  • Marco Gazel

    (NEOMA Business School)

  • Armin Schwienbacher

    (SKEMA Business School - Université Côte d’Azur)

Abstract

We study the formation and dynamics of entrepreneurial clusters in the emerging fintech industry. Using detailed data on the almost 1000 fintech startups in France to date, we find that most fintechs are geographically clustered and that the location of new fintech startups is affected, among other things, by the size of clusters and the presence of incubators. Larger clusters attract more new fintech startups, and incubators are shown to be an effective mechanism to attract new fintech startups. We further examine entrepreneurial exits of fintechs and find that being located in a larger cluster reduces the risk of failure but increases the likelihood of being acquired. Increased competition within a given segment of fintech increases failure rates. Moreover, the risk of failure is significantly lower for fintech startups that have been developed in an incubator.

Suggested Citation

  • Marco Gazel & Armin Schwienbacher, 2021. "Entrepreneurial fintech clusters," Small Business Economics, Springer, vol. 57(2), pages 883-903, August.
    • Handle: RePEc:kap:sbusec:v:57:y:2021:i:2:d:10.1007_s11187-020-00331-1
    DOI: 10.1007/s11187-020-00331-1
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    2. Gregor Dorfleitner & Lars Hornuf & Julia Kreppmeier, 2023. "Promise not fulfilled: FinTech, data privacy, and the GDPR," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-29, December.
    3. Kettunen, Jukka & Martikainen, Minna & Voulgaris, Georgios, 2021. "Employment policies in private loss firms: Return to profitability and the role of family CEOs," Journal of Business Research, Elsevier, vol. 135(C), pages 373-390.

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