Credit to Women Entrepreneurs: The Curse of the Trustworthier Sex
AbstractWomen entrepreneurs are known not only to reimburse loans swifter than men, but also to receive smaller loans. However, on average women have smaller-scope business projects and are poorer than men. A deeper investigation is thus required in order to assess the existence of gender discrimination in small-business lending. This is precisely the aim of this paper. Its contribution is twofold. Firstly, it proposes a new estimation method for assessing discrimination in loan allocation. This method operationalizes the theoretical “double standard” approach developed by Ferguson and Peters (1995, Journal of Finance). Secondly, this paper applies the new methodology to an exceptionally rich database from a Brazilian microfinance institution. The empirical results point to gender discrimination. Additionally, it is shown that reducing the information asymmetry through relationship brings no remedy to the curse of the trustworthier sex.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 11-005.
Length: 33 p.
Date of creation: Feb 2011
Date of revision:
Publication status: Published by:
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More information through EDIRC
Small Business; Microcredit; Gender; Loan Size; Denial Rate; Default;
Find related papers by JEL classification:
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-05 (All new papers)
- NEP-ENT-2011-03-05 (Entrepreneurship)
- NEP-HME-2011-03-05 (Heterodox Microeconomics)
- NEP-MFD-2011-03-05 (Microfinance)
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- The curse of the more trustworthy gender
by Economic Logician in Economic Logic on 2011-04-06 13:42:00
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