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Can local financial depth and dependence on external funding impact regional creation of new firms in Chile?

Author

Listed:
  • Andrea Cayumil Fernández

    (Universidad de Concepción)

  • Miguel Quiroga

    (Universidad de Concepción)

  • Iván Araya

    (Universidad de Concepción)

  • Gabriel Pino

    (Universidad de Talca)

Abstract

Uniform regional development is a challenge in low-income and emerging countries, making the role of financial systems to promote new business, investment, entrepreneurship, and growth particularly important. This paper investigates the combined effect of dependence on external funding and financial depth at a regional level, estimating a panel model using Chilean data. This study reveals evidence of a direct relationship between entrepreneurship and the combined effect of the two variables. Specifically, the combined effect of financial depth and external funding encourages the creation of regional companies in Chile.

Suggested Citation

  • Andrea Cayumil Fernández & Miguel Quiroga & Iván Araya & Gabriel Pino, 2022. "Can local financial depth and dependence on external funding impact regional creation of new firms in Chile?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(2), pages 387-406, April.
    • Handle: RePEc:spr:anresc:v:68:y:2022:i:2:d:10.1007_s00168-021-01076-9
    DOI: 10.1007/s00168-021-01076-9
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    More about this item

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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