Determinants of Fintech Fundraising in Europe
Determinants of Fintech Fundraising in Europe

Summary/Abstract: The study examines how the sub-indices of the Global Innovation Index (GII) affect the total value of fintech (financial technology) start-up fundraising in thirty-five European countries, including an eleven-country subsample from Central and Eastern Europe (CEE). Using annual panel data for 2013–2022. Fixed-effects models were estimated for the full sample, while random-effects models were used for the CEE countries. In these models, total fintech fundraising is the dependent variable, and the five GII subindices are the independent variables. The coefficients for Knowledge Workers, Knowledge Impact, and Business Environment are negative and statistically significant, and their effect sizes are even larger in the CEE subsample. The results suggest that improvements in the analysed factors do not necessarily lead to increased market funding for start-ups. The findings indicate that strengthening these dimensions of innovation does not automatically boost market funding for fintech start-ups. The study enriches the fintech fundraising literature by showing that improvements in the analysed factors do not translate into greater market funding for start-ups. As the study is limited to European data from 2013 to 2022, future research could extend the geographic scope or incorporate additional variables.

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