The project “The Real Effects of Financial Shocks on Short-run and Long-run Entrepreneurial Decisions” has received funding from the Finance Market Fund, under The Norwegian Research Council.
“We want to identify the barriers that prevent people from becoming entrepreneurs, says project leader Kizkitza Biguri at Oslo Business School.
Norway at the bottom
Norway has seen a steady decline in entrepreneurship over many years. The same trend is visible in other countries, but Norway ranks at the very bottom when it comes to new business creation compared to similar nations.
“It’s surprising, because Norway has a strong economy, solid institutions, and good access to financing,” says Biguri.
She wants to find out why this is happening—and how to reverse the trend.
“Entrepreneurship is important because it creates jobs, drives innovation, and contributes to long-term economic growth. We need to understand how different barriers influence who dares to take the risk,” she says.
Financial shocks
The project will uncover how financial shocks in the markets – such as sudden changes in housing prices, oil prices, or exchange rates—affect potential entrepreneurs. Such disruptions can make starting a business harder and riskier.
The researchers will examine how these shocks influence who becomes an entrepreneur, what types of businesses are created, and what this means for jobs, innovation, and the economy overall.
House and oil prices
High housing prices are closely linked to financing new businesses. If you own a home that increases in value, you can use it as collateral to fund your project.
“But we know little about how rising housing prices, combined with lack of property ownership, can hinder entrepreneurship,” says Biguri.
Also, when there are changes in oil prices, some industries struggle more than others.
“That can hold back new ideas and investments, and it affects which sectors see new businesses emerge.”
The green transition
The project will pay special attention to how major economic changes relate to Norway’s transition to a more sustainable economy.
“Green and tech-based start-ups are crucial for the future economy. We want to find out how we can strengthen them,” says Biguri.
What makes a successful entrepreneur?
The researchers will also study what characterizes successful Norwegian entrepreneurs.
“We need to understand what makes some entrepreneurs growth drivers and what traits they have, so we can support them and stimulate more innovation,” says Biguri.
She hopes the project’s results will lead to concrete policy recommendations on how to make it easier to start businesses and strengthen Norway’s green transition.
“We aim to contribute to targeted measures that support high-potential start-ups and make these schemes more effective and tailored to different types of entrepreneurs.”
