Why is a greater availability of venture capital (VC) and credit more (or less) effective in different countries for increasing start-up formations in new entrepreneurial industries, such as FinTech? In a new paper, forthcoming in Entrepreneurship Theory and Practice, we argue and show that with their established and globally diffused norms and practices, VC investors—but not banks—require a critical mass of FinTech entrepreneurship in a country to more positively influence FinTech entrepreneurship. Moreover, VC and credit markets are substitutes, especially in countries with more FinTech entrepreneurship. Our arguments and evidence show considerable consistency with the National Innovation Systems (NIS) framework.
Kolokas, D., Vanacker, T., Veredas, D., & Zahra, S. A. (Forthcoming). “Venture Capital, Credit, and FinTech Start-Up Formation: A Cross-Country Study.” Entrepreneurship Theory and Practice.