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Access to financing and regional entrepreneurship in ecuador: An approach using spatial methods

Abstract:

Entrepreneurship is one of the most effective ways to generate employment and income, and to strengthen an economy. In this process, access to financing is key to the birth of new companies and remains over time. The objective of this research is to examine the relationship between access to financing and regional entrepreneurship in Ecuador. We estimate this relationship in a country with a strong economic, population and institutional concentration in Quito and Guayaquil. Using spatial econometric techniques with data for the 221 cantons of this country, we find that access to finance is a key factor for the emergence of new companies. However, there are other factors that also contribute to the birth of new businesses. The main ones are the human capital and the specialization in the services. A public policy implication derived from the present research is that monetary and financial regulation should promote the deconcentration of financial services to take advantage of the development potential of less developed regions.