Gender and the Credit Rationing of Small Businesses

The Social Science Journal, 50(1), 55-65

11 Pages Posted: 20 Jan 2014 Last revised: 27 Dec 2014

See all articles by Naranchimeg Mijid

Naranchimeg Mijid

Connecticut Center for Innovative Entrepreneurs

Alexandra Bernasek

Colorado State University - Department of Economics

Date Written: January 5, 2013

Abstract

Rapid small business ownership growth rates among women have motivated research on issues related to gender and small business performance. The importance of credit access for the success of small businesses, as well as evidence that women have less access to credit than male business owners, has led researchers to explore the reasons for this. In this paper, we estimate a model of credit rationing by gender of the business owner. Our results are consistent with previous studies that find higher loan denial rates and lower loan application rates among women compared with men. Testing the robustness of the results we find that women seem to be rationing themselves in the credit market rather than being discriminated against by banks. Reasons for this self-rationing behavior are an important topic for further research.

Keywords: gender discriminmation, credit rationing, small business finance

JEL Classification: J16, G21, L26

Suggested Citation

Mijid, Naranchimeg and Bernasek, Alexandra, Gender and the Credit Rationing of Small Businesses (January 5, 2013). The Social Science Journal, 50(1), 55-65, Available at SSRN: https://ssrn.com/abstract=2381299

Naranchimeg Mijid (Contact Author)

Connecticut Center for Innovative Entrepreneurs ( email )

185 Main St. Suite 403
New Britain, CT 06051
United States
860-328-2954 (Phone)

Alexandra Bernasek

Colorado State University - Department of Economics ( email )

Fort Collins, CO 80523
United States
970-217-1480 (Phone)

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