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Small Business Economics

, Volume 28, Issue 2–3, pp 187–204 | Cite as

Financing, Regulatory Costs and Entrepreneurial Propensity

  • Yuen-Ping HoEmail author
  • Poh-Kam Wong
Article

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.

Keywords

business cost entrepreneurial activity financing informal investment venture capital 

Jel Classifications

G24 L26 M13 

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Notes

Acknowledgment

The authors would like to thank participants at the 2nd GEM Research Conference held in Hungary in April 2005 for helpful comments. We are also grateful to an anonymous referee for useful and detailed comments leading to the present version of the paper.

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Copyright information

© Springer Science+Business Media, LLC 2006

Authors and Affiliations

  1. 1.Entrepreneurship CentreNational University of SingaporeSingaporeSingapore

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