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Local banking development and the use of debt financing by new firms

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Abstract
We investigate the effects of local banking development on the debt financing of new firms using a large sample of Italian firms. Controlling for potential endogeneity issues, we find that new firms are more likely to use bank debt and have higher leverage in provinces with more bank branches relative to population. However, it is important to account for bank heterogeneity. For instance, more foreign banks in a province actually reduce access to bank debt. Taken together, our study provides new and nuanced evidence on the role of local banking development for the debt financing of new firms.
Keywords
entrepreneurial finance, start-ups, new ventures: banks: debt: local banking development, CAPITAL STRUCTURE, SMALL BUSINESSES, FOREIGN BANKS, LENDING RELATIONSHIPS, CREDIT, MARKETS, CRISIS, ENTREPRENEURSHIP, AVAILABILITY, CONSTRAINTS

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Citation

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MLA
Deloof, Marc, et al. “Local Banking Development and the Use of Debt Financing by New Firms.” ENTREPRENEURSHIP THEORY AND PRACTICE , vol. 43, no. 6, 2019, pp. 1250–76.
APA
Deloof, M., La Rocca, M., & Vanacker, T. (2019). Local banking development and the use of debt financing by new firms. ENTREPRENEURSHIP THEORY AND PRACTICE , 43(6), 1250–1276.
Chicago author-date
Deloof, Marc, Maurizio La Rocca, and Tom Vanacker. 2019. “Local Banking Development and the Use of Debt Financing by New Firms.” ENTREPRENEURSHIP THEORY AND PRACTICE 43 (6): 1250–76.
Chicago author-date (all authors)
Deloof, Marc, Maurizio La Rocca, and Tom Vanacker. 2019. “Local Banking Development and the Use of Debt Financing by New Firms.” ENTREPRENEURSHIP THEORY AND PRACTICE 43 (6): 1250–1276.
Vancouver
1.
Deloof M, La Rocca M, Vanacker T. Local banking development and the use of debt financing by new firms. ENTREPRENEURSHIP THEORY AND PRACTICE . 2019;43(6):1250–76.
IEEE
[1]
M. Deloof, M. La Rocca, and T. Vanacker, “Local banking development and the use of debt financing by new firms,” ENTREPRENEURSHIP THEORY AND PRACTICE , vol. 43, no. 6, pp. 1250–1276, 2019.
@article{8573571,
  abstract     = {We investigate the effects of local banking development on the debt financing of new firms using
a large sample of Italian firms. Controlling for potential endogeneity issues, we find that new
firms are more likely to use bank debt and have higher leverage in provinces with more bank
branches relative to population. However, it is important to account for bank heterogeneity. For
instance, more foreign banks in a province actually reduce access to bank debt. Taken together,
our study provides new and nuanced evidence on the role of local banking development for the
debt financing of new firms.},
  author       = {Deloof, Marc and La Rocca, Maurizio and Vanacker, Tom},
  issn         = {1042-2587},
  journal      = {ENTREPRENEURSHIP THEORY AND PRACTICE },
  keywords     = {entrepreneurial finance,start-ups,new ventures: banks: debt: local banking development,CAPITAL STRUCTURE,SMALL BUSINESSES,FOREIGN BANKS,LENDING RELATIONSHIPS,CREDIT,MARKETS,CRISIS,ENTREPRENEURSHIP,AVAILABILITY,CONSTRAINTS},
  language     = {eng},
  number       = {6},
  pages        = {1250--1276},
  title        = {Local banking development and the use of debt financing by new firms},
  url          = {http://dx.doi.org/10.1177/1042258718783486},
  volume       = {43},
  year         = {2019},
}

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