Inter-industry differences in local banks' effect on new firm formation : A regional study of entrepreneurship in Sweden

Formation of new firms is important, since new firms create jobs and economic growth. When entrepreneurs lack the financial resources which are needed to start a firm, they often turn to banks to borrow money. Previous research has shown that relationships between banks and new business borrowers most often are local and that the dependence on banks differs across industries. In light of this, the purpose of this paper is to investigate if local access to banks has a stronger relationship with the rate of new firm formation in some industries than in others. Based on cross-sectional data on all Swedish municipalities in 2009, a series of OLS regressions are estimated to test if variables used to describe the bank market in a municipality are related with the new firm formation rate, both in total and in different industry categories. The results show that the number of bank branches per capita is positively related with the total new firm formation rate. In regards to the inter-industry differences, the findings indicate that local access to banks is more important for new firm formation in some industries than in others. 

Ownership Structure, Board Composition and Entrepreneurship : Evidence from Family Firms and Venture-Capital Backed Firms

The purpose of this article is to investigate how ownership structure, especially family and/or venture-capital involvement, as well as entrepreneurial activities, defined as strategic change and renewal, help explain the involvement of independent members on boards of directors. The CEOs of 2,455 small and medium-sized, private enterprises from practically all industries were contacted in a telephone survey, resulting in an exceptionally high response rate. The findings reveal that family firms are more reluctant to involve independent directors on their boards than non-family firms that presence of venture capitalists increases the frequency of independent board members and that ownership has an impact on board roles. The results do not support the hypothesised relationship that independent directors enhance entrepreneurial activities. One implication of our study is that the often-argued-for strategic contribution of outsiders to the boards in family firms may be overemphasised. Another implication is that family firms that choose to acquire additional capital should be aware that this could result in a change in the board composition and the loss of control of the business. However, new and external owners’ inclusion on the board seems to be negotiable since there are also venture capitalists that do not insist on board representation.