Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data

Stephen, Roper and Jonathan M., Scott (2009): Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data. Published in: International Small Business Journal , Vol. 2, No. 27 (2009): pp. 149-171.

Abstract

Although accessing finance is key to the foundation of any business, particular concerns have been expressed about the ability of UK women-owned firms to obtain external finance. In this paper we use an econometric approach to explore the effect of perceptions of financial barriers to start-up on the start-up decision itself. Our analysis is based on the Global Entrepreneurship Monitor (GEM) UK 2004 database. Standardising for a range of individual characteristics, we find that women are around 7.4 per cent more likely to perceive financial barriers to business start-up than men. As perceptions of financial barriers are linked negatively to the start-up decision, stronger perceptions of financial barriers among women are having a disproportionate effect on women’s start-up decisions. However, being female also has an additional negative effect on the start-up decision, not linked to financial barriers. Policy responses, therefore, need to take into account the demand-side with the aim of countering the more negative perceptions of start-up finance among potential women entrepreneurs. Mentoring and confidence building programmes are obvious possibilities. We also find support for the value of university and college-based work experience programmes. [PUBLISHED ABSTRACT]

• Item Type: MPRA Paper
• Language: English
• Keywords: Finance; entrepreneurship; start-up; SME; gender; women
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship; G - Financial Economics > G3 - Corporate Finance and Governance; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M13 - New Firms ; Startups; D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving; Personal Finance; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination

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