Venture Capital, Credit, and FinTech Start-Up Formation: A Cross-Country Study
Dimitrios Kolokas, Tom Vanacker, David Veredas, Shaker A. Zahra
Entrepreneurship Theory and Practice · 2022 · Volume 46 · Issue 5
Abstract
Growing FinTech entrepreneurship is a recent global phenomenon. Drawing on the national innovation systems framework, we examine how countries’ venture capital (VC) and credit markets differently affect FinTech entrepreneurship across countries. We argue that with their established and globally diffused norms and practices, VC investors—but not banks—require a critical mass of FinTech entrepreneurship in a country to more positively influence FinTech entrepreneurship. Moreover, we argue that VC and credit markets are substitutes, especially in countries with more FinTech entrepreneurship. Using quantile regressions on data from 53 countries, we find support for our hypotheses.
Keywords
FinTech entrepreneurship, venture capital, credit, entrepreneurial finance, national innovation systems
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