Working Paper No. 96 (December 2008, rev. November 2010)

START-UP FINANCING IN THE AGE OF GLOBALISATION

Summary:

We investigate the determinants of start-up financing in 54 countries, using the Global Entrepreneurship Monitor (GEM) surveys for years 2001-2006. We find that financial liberalisation increases the total financial size of the individual start-up entrepreneurial project both via the increased use of external and of own funds. In addition, the volume of start-up finance responds positively to international capital inflows as represented by loans from non-resident banks and remittances, and negatively to the volume of offshore deposits. The positive impact of remittances on total volume of start-up financing is via own finance of the entrepreneur.

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