Impact of Financial Inclusion on Entrepreneurship: Evidence from G7 Countries

Abstract

Purpose- Entrepreneurs constantly need to make strategic decisions to achieve their business objectives. These decisions can be made more consciously and effectively when based on financial data and analyses. It is critically important for the long long-term success of a business that entrepreneurs have access to financial knowledge and services. The goal of the study is to determine the impact of financial institutions access and financial markets access on entrepreneurship in sample of the G G-7 economies. Design/methodology/approach approach- In this study, the analysis of the short and long run relationship among entrepreneurship, financial institutions access, and financial markets access was done through Dumitrescu and Hurlin (2012) causality test and Westerlund and Edgerton (2007) LM boostrap cointegration Findings Findings-The findings of the causality test indicate a one one-way causality from financial institutions access, and financial markets access to the entrepreneurship. On the other hand, the findings of the cointegration test indicates that financial institutions access and financial markets access positively affect the entrepreneurship in the long run. Discussion Discussion- For entrepreneurship to reach its true potential, entrepreneurs must have access to the financial services they need. Improving financial access is beneficial not only for entrepreneurs but also for the entire economy. The findings of the study indicate that both financial institutions access and financial markets access are significant determinants of entrepreneurship in the short and long long-term in keeping with theoretical expectations and the related empirical literatur literature.