Cross-country differences in the role of innovation performance in the relationship between entrepreneurial intention and access to finance

Abstract Although the majority of enterprises’ first source of financing is bank credit, they encounter many bank credit obstacles. Some entrepreneurial attitudes based on the Theory of Planned Behavior, determinants of entrepreneurial intention, namely, personal attitude, perceived behavioral control, and subjective norms, can enable enterprises to overcome these credit impediments via innovation performance. This is because firms’ innovation performance can indicate firms’ quality to lenders, and this factor might mediate the relationship between entrepreneurial intention and bank credit access. However, since the innovation performance of enterprises can change depending on the countries where businesses operate, the mediating role of innovation performance might also differ in a cross-country context. By analyzing 1367 enterprises from four European countries, this paper aims to find cross-country differences in the mediating role of innovation performance in the association between the determinant factors of entrepreneurial intention and access to finance. The results emphasize that country-level differences exist in the mediating role of innovation performance between the determinants of entrepreneurial intention and access to finance because of cultural, political, legal, and economic differences. While innovation performance fully mediates between all determinants of entrepreneurial intention and bank credit access in the Polish sample and between subjective norm and access to finance in the Hungarian sample, it does not mediate in the relationship between the determinants of entrepreneurial intention and bank credit access for the Czech and Slovakian samples. Since the results of this paper represent cross-country differences in the indirect impacts of entrepreneurial attitudes on credit access via innovation performance and confirm the impact of entrepreneurial intention on credit access of Polish firms via innovation performance, it makes significant contributions to the entrepreneurship literature.