Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data
AbstractAlthough 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 InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23342.
Date of creation: 2009
Date of revision:
Publication status: Published in International Small Business Journal 27.2(2009): pp. 149-171
Finance; entrepreneurship; start-up; SME; gender; women;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- G3 - Financial Economics - - Corporate Finance and Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-26 (All new papers)
- NEP-ENT-2010-06-26 (Entrepreneurship)
- NEP-SBM-2010-06-26 (Small Business Management)
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