The Assess the Effect of Credit Allocation to Types of Non-Financial Firms on Entrepreneurship in Developing Countries

Document Type : Original Article

Authors

1 Master Degree,, Faculty of Economics, Allameh Tabataba'i University

2 Assistant Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran.

Abstract

The purpose of this study is to evaluate the effect of how bank credit is allocated to entrepreneurship. For this purpose, the data of credits allocated to non-financial firms in different economic sectors, as well as the two indicators of "Total Early-Stage Entrepreneurial Activity" (TEA) and "The new business entry density" (ED) in middle-income economies have been Used. The results of feasible Generalized Least Squares estimation show that there is a positive and significant relationship between credit guidance to non-financial agricultural firms with the Total Early-Stage Entrepreneurial Activity Index (TEA) in the 26 countries surveyed during the period 2005 to 2014. But the relationship between credit allocation to households with this entrepreneurship index Cannot be considered positive. The results of Random Effects estimation also show a positive and significant relationship between allocation credit to non-financial industry firms and the new business entry density (ED) index in 57 developing countries from 2006 to 2014. Also, based on the research results, we can emphasize the importance of distinguishing between different types of allocated credits.

Keywords

References

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