Does the presence of a formal business plan increase formal financial support? Empirical evidence from the PSED II on the signalling and mimetic nature of formal business planning

n this article, we examine longitudinal data from the Panel Study ofEntrepreneurial Dynamics II to infer whether formal business planningaffects the amount of formalfinancing raised by nascent entrepreneurs.Ourfindings suggest that by and large the use of business plans is mimeticand reveals only limited information about the underlying entrepreneur.Yet, entrepreneurs that write formal business plan receive more formalfinancial support than had they not planned formally