Financing entrepreneurship in different regions: The failure to decentralise financing to regional centres in Sweden

The purpose of the paper is to analyse the financial search behaviour of small and medium‐sized enterprises (SMEs) in different regions and the perceived importance of different external financiers for these firms.

A postal survey targeting the chief executive officers (CEOs) of 459 SMEs was distributed in different regions of Sweden.

Large differences exist in the financial search behaviour exhibited by firms in the four different types of regions. In the metropolitan areas, firms are more active in searching for new owners, especially professional investors. In smaller municipalities, banks dominate as the most important financier.

The study might not be generalised for other settings because it was carried out in Sweden. Furthermore, the regional types used might cause some concern as to whether the findings can be generalised.

The study provides evidence that policies need to be tailor‐made for different regions because the predominant type of financier differs greatly between regions. The findings also emphasise the need for policymakers to focus on equity gap issues in regional centres.

The paper fulfils an important role in elaborating on the use and importance of different types of financing in various regions.