Gender Differences in Type 1 Credit Rationing of Small Businesses in the US
Cogent Economics & Finance Vol. 3, Iss. 1, 2015, doi.org/10.1080/23322039.2015.1021553
Posted: 28 Dec 2014 Last revised: 21 Mar 2015
Date Written: February 3, 2014
This paper explores Type 1 credit rationing by gender using data from Survey of Small Business Finances. Type 1 credit rationing occurs when borrowers receive a smaller loan than they requested. We use two measures of Type 1 credit rationing to examine whether it is related to gender discrimination in lending. Our results show that women business owners are not likely to be Type 1 rationed. However, newer female-owned firms receive significantly lower loan amounts than requested compared to their male-owned counterparts. We also find that less experienced women receive significantly lower loan amounts compared to less experienced men.
Keywords: Small Business Finances, Women Entrepreneurs, Female-owned Businesses, Gender Discrimination
JEL Classification: J16, L26, D21
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