Start-up financing:a comparative perspective

We investigate the determinants of start-up financing in 41 countries, using the Global Entrepreneurship Monitor surveys for 1998-20032. High quality of property rights increases both the total volume of finance and the use of external finance for the individual start-up. The size of the formal financial sector affects the start-up finance via enhancing the volume of self-finance. In addition, the use of external finance by start-ups correlates with the extent of financial restrictions in a country in a non-linear way. Supply of informal finance may to some extent substitute for the use of formal finance.