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Inter-industry differences in local banks' effect on new firm formation: A regional study of entrepreneurship in Sweden
2016 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Formation of new firms is important, since new firms create jobs and economic growth. When entrepreneurs lack the financial resources which are needed to start a firm, they often turn to banks to borrow money. Previous research has shown that relationships between banks and new business borrowers most often are local and that the dependence on banks differs across industries. In light of this, the purpose of this paper is to investigate if local access to banks has a stronger relationship with the rate of new firm formation in some industries than in others. Based on cross-sectional data on all Swedish municipalities in 2009, a series of OLS regressions are estimated to test if variables used to describe the bank market in a municipality are related with the new firm formation rate, both in total and in different industry categories. The results show that the number of bank branches per capita is positively related with the total new firm formation rate. In regards to the inter-industry differences, the findings indicate that local access to banks is more important for new firm formation in some industries than in others. 

Place, publisher, year, edition, pages
2016. , 83 p.
JIBS Dissertation Series, ISSN 1403-0470
Keyword [en]
New firm formation, Local banks, Inter-industry differences, Entrepreneurship, Business lending, Regional economics
National Category
URN: urn:nbn:se:hj:diva-29987ISRN: JU-IHH-NAA-2-20160048OAI: diva2:930040
Subject / course
IHH, Economics
Available from: 2016-06-03 Created: 2016-05-21 Last updated: 2016-06-03Bibliographically approved

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