Gender Bias and Credit Market Barriers for Female Entrepreneurs

49 Pages Posted: 19 Sep 2012 Last revised: 5 Nov 2013

See all articles by Steven Ongena

Steven Ongena

University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR)

Alexander A. Popov

European Central Bank (ECB)

Date Written: November 4, 2013

Abstract

We identify the causal effect of gender bias on access to finance. We extract an exogenous measure of gender bias from survey responses by descendants of US immigrants on questions about the role of women in society. We then investigate a detailed dataset on 6,000 small business firms from 17 countries and find that in countries with higher gender bias, female-owned firms are more frequently discouraged from applying for bank credit and reliant on informal finance. These results are not driven by credit risk differences between female- and male-owned firms in high-gender bias countries or by any idiosyncrasies in the set of countries in our sample.

Keywords: cultural bias, gender-based discrimination, female-owned firms, credit supply

JEL Classification: G21, J16, N32, Z13

Suggested Citation

Ongena, Steven R. G. and Popov, Alexander A., Gender Bias and Credit Market Barriers for Female Entrepreneurs (November 4, 2013). Available at SSRN: https://ssrn.com/abstract=2148914 or http://dx.doi.org/10.2139/ssrn.2148914

Steven R. G. Ongena (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Alexander A. Popov

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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