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<p>The purpose of this paper is to examine the substitution vs complementary effect of venture capital (VC) and bank credit (BC) on new business creation (NBC). The study used resource-based view to answer a question why some countries have more entrepreneurial entry than others? The dataset comprises of country-level variables for the period 2008–2019 for 33 Asian and European countries. Lagged year effects are used to tackle possible endogeneity in the model. Using quantile regression (QR), the study found that VC and BC are important entrepreneurial resources for generating new business creation activity, however, countries where VC is readily available, entrepreneurs often avoid BC and vice versa indicating substitution effect. The effect of this negative interaction is stronger in Asian contexts than in the European sample. The research has important policy implications for entrepreneurs, VCs, and financial institutions.</p>

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The role of venture capital and bank credit in new ventures creation

  • 期刊论文

  • 发表日期：

    2025年4月25日

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  • Muhammad Adnan,
  • Muhammad Zubair Khan

摘要

The purpose of this paper is to examine the substitution vs complementary effect of venture capital (VC) and bank credit (BC) on new business creation (NBC). The study used resource-based view to answer a question why some countries have more entrepreneurial entry than others? The dataset comprises of country-level variables for the period 2008–2019 for 33 Asian and European countries. Lagged year effects are used to tackle possible endogeneity in the model. Using quantile regression (QR), the study found that VC and BC are important entrepreneurial resources for generating new business creation activity, however, countries where VC is readily available, entrepreneurs often avoid BC and vice versa indicating substitution effect. The effect of this negative interaction is stronger in Asian contexts than in the European sample. The research has important policy implications for entrepreneurs, VCs, and financial institutions.