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.
Download (288kB) | Preview
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|
|Original Title:||Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data|
|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
|Depositing User:||Jonathan M. Scott|
|Date Deposited:||18. Jun 2010 05:42|
|Last Modified:||30. Dec 2015 18:38|
Ahl, H. (2002) ‘The Making of the Female Entrepreneur: A Discourse Analysis of Research Texts on Women’s Entrepreneurship’, in Dissertation Series No. 15. Jonkoping: Jonkoping International Business School.
Ahl, H. (2006) ‘Why Research on Women Entrepreneurs Needs New Directions’, Entrepreneurship Theory and Practice 30: 595-621.
Allen, I.E., Elam, A., Langowitz, N. and Dean, M. (2008) The Global Entrepreneurship Monitor: Report on Women and Entrepreneurship. Babson Park MA, Babson College.
Beaucage, A., Laplante, N. and Légaré, R. (2004) ‘Le Passage au Travail Autonome: Choix Imposé ou Choix qui s’impose?’ [The Shift to Self-employment: An Imposed Choice or an Obvious Choice?], Relations Industriells/Industrial Relations 59(2): 345-378.
Blake, M. (2006) ‘Gendered Lending: Gender, Context and the Rules of Business Lending’, Venture Capital 8(2): 183-201.
Brooksbank, D.J., Jones-Evans, D., Kwong, C.C.Y and Thompson, P. (2007) ‘Are Potential Female Entrepreneurs in the UK Financially Constrained?’, paper presented at the International Council for Small Business (ICSB) 52nd World Congress, Turku, Finland, June.
Brush, C.G., Carter, N.M., Gatewood, E.H., Greene, P.G. and Hart, M.H. (2006) ‘The Use of Bootstrapping by Women Entrepreneurs in Positioning for Growth’, Venture Capital 8(1): 15-31.
Burke, A.E., Fitzroy, F.R. and Nolan, M.A. (2000) ‘When Less is More: Distinguishing between Entrepreneurial Choice and Performance’, Oxford Bulletin of Economics and Statistics 62(5): 565-587.
Burke, A.E., Fitzroy, F.R. and Nolan, M.A. (2002) ‘Self-employment, Wealth and Job Creation: The Role of Gender, Non-pecuniary Motivation and Entrepreneurial Ability’, Small Business Economics 19(3): 255-270.
Buttner, E.H. and Moore, D.P. (2001) ‘Women’s Organizational Exodus to Entrepreneurship: Self-reported Motivations and Correlates with Success’, Journal of Small Business Management January: 34-46.
Carter, N., Brush, C., Greene, P., Gatewood, E. and Hart, M. (2003) ‘Women Entrepreneurs who Break through to Equity Financing: the Influence of Human, Social and Financial Capital’, Venture Capital 5(1): 1-28.
Carter, S. and Cannon, T. (1992) Women as Entrepreneurs. London: Academic Press.
Carter, S. and Rosa, P. (1998) ‘The Financing of Male- and Female-owned Businesses’, Entrepreneurship & Regional Development 10(3): 225-241.
Carter, S. and Shaw, E. (2006) Women’s Business Ownership: Recent Research and Policy Developments. Sheffield: Small Business Service.
Carter, S., Anderson, S. and Shaw, E. (2001) Women’s Business Ownership: A Review of the Academic, Popular and Internet Literature. Glasgow: University of Strathclyde.
Carter, S., Shaw, E., Lam, W. and Wilson, F. (2007) ‘Gender, Entrepreneurship and Bank Lending: The Criteria and Processes Used by Bank Loan Officers in Assessing Applications’, Entrepreneurship Theory and Practice 31(3): 427-444.
Clain, S.H. (2000) ‘Gender Differences in Full-time Self-employment’, Journal of Economics and Business 52: 499-513.
Constantinidis, C., Cornet, A. and Asandei, S. (2006) ‘Financing of Women-owned Ventures: the Impact of Gender and Other Owner- and Firm-related Variables’, Venture Capital 8(2): 133-157.
Cressy, R. (1996) ‘Are Business Startups Debt-rationed?’, Economic Journal 106: 1253-1270.
Davidson, M. (1992) Shattering the Glass Ceiling. London: Chapman.
Ennew, C. and McKechnie, S. (1998) ‘The Nature of the Banking Relationship: a Comparison of the Experiences of Male and Female Small Business Owners’, International Small Business Journal 16(3): 39-55.
Evans, D.S. and Jovanovic, B. (1989) ‘An Estimated Model of Entrepreneurial Choice under Liquidity Constraints’, Journal of Political Economy 97(4): 808-827.
Fraser, S. (2005) Finance for Small and Medium Sized Enterprises: A Report on the 2004 UK Survey of SME Finances. Coventry: Warwick University.
Fraser, S. (2007) Comparisons of Ethnic Minority and White Owned Businesses: Findings from the 2005 UK Survey of SME Finances Ethnic Minority Booster Survey, paper presented at the 3rd ESRC and SBS Seminar, ‘Entrepreneurial Finance’, Warwick Business School, Coventry, June.
Freel, M., Carter, S., Mason, C. and Tagg, S. (2007) ‘The Latent Demand for Bank Debt: Characterizing “Discouraged Borrowers”’, paper presented at the RENT conference, Cardiff, November.
Georgellis, Y. and Wall, H.J. (2005) ‘Gender Differences in Self-employment’, International Review of Applied Economics 19(3): 321-342.
Hamilton, R.T. and Fox, M.A. (1998) ‘The Financing Preferences of Small Firm Owners’, International Journal of Entrepreneurial Behaviour and Research 4(3): 239-248.
Harding, R. (2004) Global Entrepreneurship Monitor UK 2004. London: GEM UK.
Heilbrunn, S. (2004) ‘Impact of Gender on Difficulties Faced by Entrepreneurs’, International Journal of Entrepreneurship & Innovation 5(3): 159-165.
Hill, F.M., Leitch, C.M. and Harrison, R.T. (2006) ‘“Desperately Seeking Finance?” The Demand for Finance by Women-owned and -led Businesses’, Venture Capital 8(2): 159-182.
Hisrich, R.D. and Brush, C. (1986) The Woman Entrepreneur: Starting, Financing, and Managing a Successful New Business. Lexington, MA: Lexington Books, Inc.
Holmquist, E. and Sundin, C. (1989) ‘The Growth of Women’s Entrepreneurship – Push or Pull Factors?’, paper presented at EIASM Conference on Small Business, University of Durham Business School, Durham, November.
Holtz-Eakin, D., Joulfaian, D. and Rosen, H.S. (1994) ‘Entrepreneurial Decisions and Liquidity Constraints’, Rand Journal of Economics 25: 334–347.
Howorth, C.A. (2001) ‘Small Firms’ Demand for Finance’, International Small Business Journal 19(4): 78-86.
Jennings, J.E. and McDougald, M.S. (2007) ‘Work-family Interface Experiences and Coping Strategies: Implications for Entrepreneurship Research and Practice’, Academy of Management Review 32(3): 747-760.
Johnson, S. and Storey, D.J. (1993) Women Entrepreneurs. London: Routledge.
Kanter, R. (1977) Men and Corporations. New York: Basic Books.
Kon, Y. and Storey, D.J. (2003) ‘A Theory of Discouraged Borrowers’, Small Business Economics 21(1): 37-49.
Koper, G. (1993) ‘Women Entrepreneurs and the Granting of Business Credit’, in S. Allen and C. Truman (eds) Women in Business: Perspectives on Women Entrepreneurs, pp. 57-69. London: Routledge.
Langowitz, N. and Minniti, M. (2007) ‘The Entrepreneurial Propensity of Women’, Entrepreneurship, Theory and Practice 31(3): 341-364.
Leung, D. (2006) ‘The Male/Female Earnings Gap and Female Self-employment’, Journal of Socio-Economics 35(5): 759-779.
Lindgren, M. and Packendorff, J. (2006) ‘Project Work as Construction of Femininity and Masculinity in the Lives of Human Beings’, Journal of Management Studies 43(3): 842-866.
Maddala, G. (1973) Limited Dependent and Qualitative Variables in Econometrics. New York: Cambridge University Press.
Madill, J., Riding, A.L. and Haines Jr., G.H. (2006) ‘Women Entrepreneurs: Debt Financing and Banking Relationships’, Journal of Small Business & Entrepreneurship 19(2): 121-142.
Manolova, T., Manev, I., Carter, N. and Gyoshev, B. (2006) ‘Breaking the Family and Friends’ Circle: Predictors of External Financing Usage among Men and Women Entrepreneurs in a Transitional Economy’, Venture Capital 8(2): 109-132.
Marlow, S. (1997) ‘Self Employed Women – New Opportunities, Old Challenges?’, Entrepreneurship & Regional Development 9(3): 199-210.
Marlow, S. (2006) ‘A Safety Net or Ties that Bind? Women, Welfare and Self-employment’, International Journal of Sociology and Social Policy 26(9/10): 397-410.
Martin, L., Warren-Smith, I., Scott, J.M. and Roper, S. (2008) ‘Boards of Directors and Gender Diversity in UK Companies’, Gender in Management: An International Journal 23(3): 194-208.
Orser, B.J., Riding, A.L. and Manley, K. (2006) ‘Women Entrepreneurs and Financial Capital’, Entrepreneurship: Theory & Practice 30(5): 643-665.
Rosa, P., Hamilton, D. and Carter, S. (1996) ‘Gender as a Determinant of Business Performance: Insights from a British Study’, Small Business Economics 8(6): 463-478.
Schwartz, E.B. (1976) ‘Entrepreneurship: a New Female Frontier’, Journal of Contemporary Business winter: 47-76.
Tanton, M. (1994) Women in Management Learning. London: Routledge.
Taylor, M. (1998) Self-employment and Windfall Gains in Britain: Evidence from Panel Data. Colchester: Institute for Social and Economic Research, University of Essex.
Treichel, M.Z. and Scott, J.A. (2006) ‘Women-Owned Businesses and Access to Bank Credit: Evidence from Three Surveys Since 1987’, Venture Capital 8(1): 51-67.
Van Auken, H.E, Gaskill, L.R. and Kao, S. (1993) ‘Acquisition of Capital by Women Entrepreneurs: Patterns of Initial and Refinancing Capitalisation’, Journal of Small Business and Entrepreneurship 10(4): 44-55.
Verheul, I. and Thurik, R. (2001) ‘Start-up Capital: “Does Gender Matter?”’, Small Business Economics 16(4): 329-345.
Warren-Smith, I. and Jackson, C. (2004) ‘Women Creating Wealth through Rural Enterprise’, International Journal of Entrepreneurial Behaviour & Research 10: 369-383.
Watson, J. (2002) ‘Comparing the Performance of Male- and Female-controlled Businesses: Relating Outputs to Inputs’, Entrepreneurship: Theory & Practice 26(3): 91-100.
Watson, J. and Newby. R. (2007) ‘Gender Differences in the Goals of Owner-operated SMEs’, in N.M. Carter, C. Henry, B. Ó Cinnéide and K. Johnston (eds) Female Entrepreneurship: Implications for Education, Training and Policy, pp. 37-68. Abingdon: Routledge.
Wyer, P., Ekanem, I., North, D. and Deakins, D. (2007) Literature Review for the Small Business Service: the Impact of Perceived Access to Finance Difficulties on the Demand for External Finance, Final Report. London: Centre for Enterprise and Economic Development Research, Middlesex University.