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Firm, owner, and financing characteristics: differences between female- and male-owned small businesses

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  • Alicia M. Robb
  • John D. Wolken

Abstract

Differences in financing patterns and financial characteristics between female- and male-owned firms are often attributed to imperfections in credit markets. However, these differences could arise for many reasons, such as differences in the characteristics and preferences of owners and firms. The differences in lending patterns by gender may in fact have little or nothing to do with supply side factors or market imperfections. The goal of our paper is to test the hypothesis that differences in financing patterns between female- and male-owned small businesses can be explained by differences in business, credit history, and owner characteristics other than gender. In what follows, we first describe how owner, business, and financing characteristics of female-owned businesses differ from male-owned businesses. We then conduct a multivariate analysis of indicators of credit use and recent lending experiences, modeling each of these as a function of firm, owner, and credit history characteristics.

Suggested Citation

  • Alicia M. Robb & John D. Wolken, 2002. "Firm, owner, and financing characteristics: differences between female- and male-owned small businesses," Finance and Economics Discussion Series 2002-18, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:2002-18
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    References listed on IDEAS

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    1. Boden, Richard Jr., 1996. "Gender and self-employment selection: An empirical assessment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 25(6), pages 671-682.
    2. David W. Blackwell & Drew B. Winters, 1997. "Banking Relationships And The Effect Of Monitoring On Loan Pricing," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 275-289, June.
    3. Frederick C. Scherr & Timothy F. Sugrue & Janice B. Ward, 1993. "Financing the Small Firm Start-Up: Determinants of Debt Use," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 3(1), pages 17-36, Fall.
    4. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    5. James S. Ang & James Wuh Lin & Floyd Tyler, 1995. "Evidence on the Lack of Separation between Business and Personal Risks among Small Businesses," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 4(2), pages 197-210, Fall.
    6. Berger, Allen N & Udell, Gregory F, 1995. "Relationship Lending and Lines of Credit in Small Firm Finance," The Journal of Business, University of Chicago Press, vol. 68(3), pages 351-381, July.
    7. Riding, Allan L. & Swift, Catherine S., 1990. "Women business owners and terms of credit: Some empirical findings of the Canadian experience," Journal of Business Venturing, Elsevier, vol. 5(5), pages 327-340, September.
    8. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003. "Discrimination in the Small-Business Credit Market," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 930-943, November.
    9. Blackwell, David W & Winters, Drew B, 1997. "Banking Relationships and the Effect of Monitoring on Loan Pricing," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 275-289, Summer.
    10. Cooper, Arnold C. & Woo, Carolyn Y. & Dunkelberg, William C., 1989. "Entrepreneurship and the initial size of firms," Journal of Business Venturing, Elsevier, vol. 4(5), pages 317-332, September.
    11. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
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    Cited by:

    1. Elena Bardasi & Shwetlena Sabarwal & Katherine Terrell, 2011. "How do female entrepreneurs perform? Evidence from three developing regions," Small Business Economics, Springer, vol. 37(4), pages 417-441, November.
    2. Reyes Aterido & Mary Hallward-Driemeier, 2011. "Whose business is it anyway?," Small Business Economics, Springer, vol. 37(4), pages 443-464, November.
    3. Sabarwal, Shwetlena & Terrell, Katherine, 2008. "Does gender matter for firm performance ? evidence from Eastern Europe and Central Asia," Policy Research Working Paper Series 4705, The World Bank.
    4. Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2010. "Does gender matter in bank-firm relationships? Evidence from small business lending," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2968-2984, December.
    5. repec:spr:rvmgts:v:11:y:2017:i:3:d:10.1007_s11846-016-0194-z is not listed on IDEAS

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    Keywords

    Small business;

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