Part of the explanation for the lower cost of capital, is that US investors have a higher risk appetite than those in most other OECD economies; also, the US has an arguably more efficient pipeline (VC firms, etc) for getting money from investors to entrepreneurs.
Some of it is no doubt influenced by regulatory issues (such as taxation differences), but cultural differences likely also play a role.
Certainly here in the UK and certainly upto the mid 00's, if someone ended up bankrupt their life was over, blocked from credit in most cases, massively high interest rates in the future if they could get credit, the lenders certainly got their pound of flesh so it wasnt worth feeding the parasites, the population became risk averse.
Repression comes back to bite...
The other problem is the Class system, something Royalty holds onto dearly, and what some euphemistically call the old boys network, but it keeps people in their place so the [European] Caste system acts as a drag on the economy.
The legislation around bankruptcy, however, is definitely very repressive on the continent too. TBH I don't think it's particularly lenient in the US either, but over there creating and operating companies is easier and cheaper, which means people can more easily offload debt obligations.
> The legislation around bankruptcy, however, is definitely very repressive on the continent too.
Europe has the largest slice of banking and financial interests but thats being slowly chipped away by the US. Look at some of the old banks which have gone bust or been swallowed up for liquidity reasons since the financial crisis in 2008. You have the US and UK printing money to dilute China's hard work, the Weimar republic has a lot of parallels.
A lot of American cultural difference relative to the rest of the world can be explained almost entirely by the unusual absence of Tall Poppy Syndrome[0] that is a hallmark of most other industrialized societies. American culture respects those taking large risks for concomitant rewards, and doesn't begrudge the rewards that might accrue to someone taking those risks. It is easy to have a high risk appetite when it increases one's social status.
I think fear of bankruptcy can be a higher deterrent for foolish risks than social stigma.
> In many parts of the world, trying something and failing is held against you In Europe you don't lose people's sympathy if you try something and fail.
A lot of the VC pipeline also reaps rewards from how USA was the one country with untouched industry at the end of WW2 and then funneled huge amounts of moneys into expanding, not reconstruction.
What makes the difference is the regulatory environment around corporations.