Aziz İskandarov

Type of the article: Research Article

Abstract
In transition economies, the contribution of financial and transport infrastructure to new firm formation remains a first-order public-finance question. This paper examines how financial infrastructure and air connectivity relate to new business density across 28 transition economies over 2010–2024, and whether resource dependence moderates the relative contribution of branch-density and credit-volume channels (FDI and gross fixed capital formation serve as secondary benchmarks). Two-way fixed-effects panel regressions on an unbalanced panel of 28 transition economies (420 country-years as the maximal frame; the primary new-business-density model is identified on 249 complete cases from 24 economies), complemented by pooled OLS and between-effects estimators, are estimated for the three outcomes. Within countries, ATM penetration is the financial-infrastructure indicator most consistently associated with entrepreneurial activity (β = 0.011); trade openness is positive (β = 0.006) but does not survive relaxing the air-restricted sample. The relative contribution of bank branches versus domestic credit shifts with resource-rent intensity (branches × R = +0.016; credit × R = −0.011) − a pattern directionally stable across specifications but resting on the interaction design, a small complete-case panel, and a static moderator, its branch leg particularly sensitive to sample composition; the reversal is therefore read as suggestive rather than definitive. Air-passenger connectivity is a structural between-country correlate of entrepreneurship (between-effects β = +0.310) but not a within-country driver. New business density is more fully explained than the secondary outcomes (within-R2 = 0.26 versus 0.14 and 0.09); conclusions are therefore drawn for firm entry rather than for the investment-and-entrepreneurial ecosystem.