Determinants of Entrepreneurial Intentions of Youth: The Role of Access to Finance

This study aims to highlight the role of access to finance as one of the determinants on the decision to enter into entrepreneurship of students regarded as potential entrepreneurs. For achieving our main objective, we created a questionnaire. As a method of analysis, we run the least square logistic regression, with entrepreneurial intentions as a dependent variable and knowledge, education and availability of financial resources as predictors. We also included gender, university and locality as control variables. The sample is formed of 181 students from two universities from the North-Eastern region of Romania. The results reveal that access to finance is a significant determinant of the decision to enter into entreprenenruship for young people. Moreover, we show that the relation between access to finance and entrepreneurial intentions changes according to gender, university and locality of origin. Female students’ entrepreneurial intentions are influenced by the availability of bank loans and personal savings, while in case of male students - only by the availability of funds coming from family and friends. The funds coming from family and friends also determine students' entrepreneurial intentions coming from rural or urban areas. Entrepreneurial intentions are negatively related to education for male students and those coming from an economic profile university, and positively related to business knowledge only for students from rural areas. The results obtained could be important for financial resources providers (because they offer insight into how easy access to finance stimulates the entrepreneurial intentions of youth), for education providers (who can adapt their training programs and extracurricular activities to strengthen entrepreneurial intentions), and for decision makers (which may adopt appropriate policies to stimulate the economic development of an area).