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


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  • Stephen, Roper
  • Jonathan M., Scott


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]

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23342.

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Date of creation: 2009
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Publication status: Published in International Small Business Journal 27.2(2009): pp. 149-171
Handle: RePEc:pra:mprapa:23342

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Keywords: Finance; entrepreneurship; start-up; SME; gender; women;

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Cited by:
  1. Bosma, Niels, 2013. "The Global Entrepreneurship Monitor (GEM) and Its Impact on Entrepreneurship Research," Foundations and Trends(R) in Entrepreneurship, now publishers, now publishers, vol. 9(2), pages 143-248, February.
  2. Pelger, Ines, 2012. "Male vs. female business owners: Are there differences in investment behavior?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century, Verein für Socialpolitik / German Economic Association 62016, Verein für Socialpolitik / German Economic Association.
  3. José Ernesto Amoros & Niels Bosma & Jonathan Levie, 2011. "Ten Years of Global Entrepreneurship Monitor: Accomplishments and Prospects," Global Entrepreneurship Monitor Working Paper Series, Global Entrepreneurship Research Association 1105, Global Entrepreneurship Research Association, revised Aug 2011.
  4. Tammy Rogers, 2012. "Bank market structure and entrepreneurship," Small Business Economics, Springer, Springer, vol. 39(4), pages 909-920, November.
  5. repec:dgr:uvatin:2009088 is not listed on IDEAS
  6. Claudia Álvarez & David Urbano & José Amorós, 2014. "GEM research: achievements and challenges," Small Business Economics, Springer, Springer, vol. 42(3), pages 445-465, March.
  7. In Lee & Matthew Marvel, 2014. "Revisiting the entrepreneur gender–performance relationship: a firm perspective," Small Business Economics, Springer, Springer, vol. 42(4), pages 769-786, April.
  8. Dong Xiang & Andrew C. Worthington & Helen Higgs, 2011. "Firm-level determinants and impacts of finance-seeking behaviour and outcomes for small and medium-sized enterprises (SMEs) in Australia," Discussion Papers in Finance finance:201115, Griffith University, Department of Accounting, Finance and Economics.
  9. Sara Carter & Samuel Mwaura, 2014. "The Financing of Diverse Enterprises: Evidence from the SME finance monitor," Research Papers, University of Warwick, Warwick Business School, Enterprise Research Centre 0018, University of Warwick, Warwick Business School, Enterprise Research Centre.


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