Entrepreneurship, Innovation and Regional Development
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Entrepreneurship, Innovation and Regional Development

Edited by David Smallbone, Markku Virtanen and Arnis Sauka

Entrepreneurship and innovation are arguably the main drivers of economic development today. This book explores the two in depth, at both the national and regional levels, using a variety of methodologies. The expert contributors discuss the subject from a policy perspective, with case studies from a host of countries including new member states of the EU as well as established EU member states. Split into three parts, the book focuses on: innovation, entrepreneurial activity and regional development, and entrepreneurship and SME policy.
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Chapter 9: The capitalisation of new firms: exploring the influence of entrepreneurial characteristics on start-up finance

Paul Robson, Tyler Chamberlin and Mark Freel


This chapter is concerned with understanding those human capital factors which predict higher or lower levels of start-up financing. The government agencies and authorities devote substantial amounts of resources to promoting and assisting start-up businesses in the United Kingdom (UK), and beyond. To the extent that undercapitalisation associates with poorer survival prospects, appreciating the non-financial factors influencing capitalisation ought to better inform interventions. The data used are from a large-scale survey of UK small and medoium-sized enterprises (SMEs). The results show that financial qualifications or training, habitual entrepreneurs and exporting firms all have higher amounts of start-up finance. The results also show that female-led businesses have lower start-up finance compared to male-led businesses. Taken together, the results suggest that policy-makers should be focused on developing human capital, or entrepreneurial characteristics, rather than attempting to push more money into markets.

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