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Financing, Regulatory Costs and Entrepreneurial Propensity

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Listed author(s):
  • Yuen-Ping Ho

    ()

  • Poh-Kam Wong

Abstract

In this paper, we compared the availability of different types of financing sources to address the issue of capital availability to entrepreneurial propensity and we scrutinise the influence of business costs by utilising a new composite index using data from the World Bank’s Doing Business Database. The availability of three types of financing sources was analysed: traditional debt financing, venture capital financing, and informal investments. The study’s findings show that only informal investments have statistically significant influence on entrepreneurial propensity. Regulatory business costs were found to deter opportunity driven entrepreneurship, but had no impact on necessity entrepreneurship. Copyright Springer Science+Business Media, LLC 2007

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File URL: http://hdl.handle.net/10.1007/s11187-006-9015-0
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Article provided by Springer in its journal Small Business Economics.

Volume (Year): 28 (2007)
Issue (Month): 2 (March)
Pages: 187-204

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Handle: RePEc:kap:sbusec:v:28:y:2007:i:2:p:187-204
DOI: 10.1007/s11187-006-9015-0
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/new+%26+forthcoming+titles+%28default%29/journal/11187/PS2

Keywords: business cost; entrepreneurial activity; financing; informal investment; venture capital; G24; L26; M13;

Find related papers by JEL classification:

  • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
  • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
  • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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  1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
  2. Christian Keuschnigg & Søren Bo Nielsen, 2004. "Taxation and Venture Capital Backed Entrepreneurship," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(4), pages 369-390, 08.
  3. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2004. "Business environment and firm entry : Evidence from international data," Policy Research Working Paper Series 3232, The World Bank.
  4. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
  5. Paul Schreyer, 2000. "High-Growth Firms and Employment," OECD Science, Technology and Industry Working Papers 2000/3, OECD Publishing.
  6. Josep-Maria Arauzo-Carod & Agustí Segarra-Blasco, 2005. "The Determinants of Entry are not Independent of Start-up Size: Some Evidence from Spanish Manufacturing," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(2), pages 147-165, 09.
  7. repec:hrv:faseco:30747190 is not listed on IDEAS
  8. Cassar, Gavin, 2004. "The financing of business start-ups," Journal of Business Venturing, Elsevier, vol. 19(2), pages 261-283, March.
  9. Mihir Desai & Paul Gompers & Josh Lerner, 2003. "Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe," NBER Working Papers 10165, National Bureau of Economic Research, Inc.
  10. Gartner, William B., 1990. "What are we talking about when we talk about entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 5(1), pages 15-28, January.
  11. Bates, Timothy, 1995. "Self-employment entry across industry groups," Journal of Business Venturing, Elsevier, vol. 10(2), pages 143-156, March.
  12. Markku Maula & Erkko Autio & Pia Arenius, 2005. "What Drives Micro-Angel Investments?," Small Business Economics, Springer, vol. 25(5), pages 459-475, December.
  13. Bamford, Charles E. & Dean, Thomas J. & Douglas, Thomas J., 2004. "The temporal nature of growth determinants in new bank foundings: implications for new venture research design," Journal of Business Venturing, Elsevier, vol. 19(6), pages 899-919, November.
  14. Gifford, Sharon, 1997. "Limited attention and the role of the venture capitalist," Journal of Business Venturing, Elsevier, vol. 12(6), pages 459-482, November.
  15. Paul Gompers & Josh Lerner, 2001. "The Venture Capital Revolution," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 145-168, Spring.
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