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The Determinants of Fintech emergence: a cross country study

Koçer, Meriç Yıldız.
The emergence of Financial Technology (Fintech) entrepreneurship differs across countries over the years. This thesis explores the determinants of Fintech entrepreneurship that emerged in the last decade. To illustrate the effects of possible determinants three historically connected model in Entrepreneurship theory is used. The first model relates the level of Fintech entrepreneurship to economic development level where the relationship found to be positive. The second model argues that a regime switching effect occurs due to technological development. Consequently, the widespread usage of mobile phone has created a demand increase in alternative financial services products and hence motivates the talented individuals to establish Fintech startups. The third model is inspired from Verheul et al’s Eclectic Theory of Entrepreneurship (2002) which explains determinants of Entrepreneurship by combining different disciplinary approaches based on a supply and demand framework. Analogously, the supply and demand factors used in the eclectic model proposed in this thesis compiled from qualitative academic researches and practitioner reports about Fintech. This thesis shows that while Fintech entrepreneurship positively influenced by high economic development level, mobile phone subscription, available traditional financial services, and government interventions such as availability of Venture Capital, supportive STEM education, and business friendly environment, it negatively affected by the affordable traditional financial services in developed countries. In conclusion, along with its parallel findings to existing qualitative studies on Fintech, this thesis is contributing to the entrepreneurship literature by providing evidence that the main principles of entrepreneurship theory are applicable to this particular field.