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Sex of Applicant and the Availability of Business “Start-Up†Finance

Author

Listed:
  • Michael Fay

    (Department of Marketing, University of Otago, PO Box 56, Dunedin, New Zealand.)

  • Lesley Williams

    (Department of Marketing Lincoln University Private Bag Canterbury New Zealand.)

Abstract

While women are undoubtedly disadvantaged in the process of preparing for a career in business ownership, there is a lack of experimental evidence to verify the belief that loan managers discriminate against women at the point of loan application. This study, therefore, investigates the extent to which concerns that women in business face discrimination from trading banks when seeking to raise start-up capital are valid. Scenarios of an application for loan finance to purchase a commercial enterprise were mailed to loan officers of major trading bank branches. The scenarios were identical in all respects, except that half included a photograph of a male applicant and the remainder a photograph of a female. Loan officers were asked whether or not they would approve loan finance for the proposed business, and to indicate factors that contributed to their decision. Significant differences in loan officer response to female and male applicants were observed. This supported the widely held perception that women face discrimination in seeking start-up capital.

Suggested Citation

  • Michael Fay & Lesley Williams, 1991. "Sex of Applicant and the Availability of Business “Start-Up†Finance," Australian Journal of Management, Australian School of Business, vol. 16(1), pages 65-72, June.
    • Handle: RePEc:sae:ausman:v:16:y:1991:i:1:p:65-72
    DOI: 10.1177/031289629101600104
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    References listed on IDEAS

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    1. Robert L. Anderson & Kathleen P. Anderson, 1988. "A Comparison of Women in Small and Large Companies," Entrepreneurship Theory and Practice, , vol. 12(3), pages 23-33, January.
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    Cited by:

    1. Thompson Piers & Jones-Evans Dylan & Kwong Caleb, 2012. "Entrepreneurship in Deprived Urban Communities: The Case of Wales," Entrepreneurship Research Journal, De Gruyter, vol. 2(1), pages 1-33, January.
    2. Curtiss, Jarmila, 2012. "Determinants of Financial Capital Use: Review of theories and implications for rural businesses," Factor Markets Working Papers 123, Centre for European Policy Studies.
    3. Monica Zimmerman Treichel & Jonathan A. Scott, 2005. "Women-Owned businesses and access to bank credit: Evidence from three surveys since 1987," Venture Capital, Taylor & Francis Journals, vol. 8(1), pages 51-67, September.

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