Financing Pathways for Entrepreneurs in the Philippines: A Big Data Analysis using DSLOGIT Regression

Liezel Cruz; Leila Rahnema

Liezel S. Cruz Institute of Cooperatives and Bio-Enterprise Development, College of Economics and Management, University of the Philippines Los Baños
Leila Rahnema University of the Philippines, Cesar E.A. Virata School of Business, Diliman, Quezon City 1101, Philippines

Keywords: big data analysis; double selection Lasso Logistic Regression; MSME; consumer finance survey; entrepreneurship; proprietorship

Abstract

As echoed by many other authors and experts, micro, small, and medium enterprises (MSMEs) are crucial for economic development. This study uses the 2014 Consumer Finance Survey conducted by the Bangko Sentral ng Pilipinas and a double-selection lasso logistic regression model (DSLOGIT) to identify factors influencing the likelihood of starting and operating single proprietorships in the Philippines. The findings highlight the significant role of various financing sources and individual characteristics. Microfinancing is positively correlated with single proprietorship, while loans from commercial banks, cooperatives, and close relatives negatively affect business ownership. These insights can help policymakers design more effective support mechanisms for MSMEs.