Financing Patterns and Performance Outcomes of Women- versus Men-Owned Young Entrepreneurial Firms

55 Pages Posted: 19 Oct 2017 Last revised: 14 Aug 2019

See all articles by Rebel A. Cole

Rebel A. Cole

Florida Atlantic University

Tatyana Sokolyk

Brock University - Department of Finance, Operations & Information Systems

Date Written: June 30, 2019

Abstract

This study examines and compares characteristics, financing patterns, and performance outcomes of women-owned and men-owned young entrepreneurial firms. Using fully imputed data from the Kauffman Firm Surveys of U.S. start-up firms, we first examine the differences in firm and owner characteristics between women- and men-owned firms at the firm’s start-up. Second, we explore the differences in equity and debt financing between the two groups of firms during the first several years of the firm’s operations. Third, we explore whether performance outcomes (in terms of survival and growth) of young entrepreneurial firms are different for firms owned by women versus firms owned by men. We find large and significant differences in the amount of start-up capital (debt and equity), with women-owned firms at a significant disadvantage. We also find that women-owned firms are significantly less likely to use business credit than are men-owned firms which is important considering prior findings that firms using business credit at start-up survive longer and grow faster. Finally, while we find large and significant univariate differences in performance of women-owned vs. men-owned firms, these differences disappear in our multivariate analysis of revenues and survival. However, these differences remain significant for employment.

Keywords: women-owned firms, start-ups, Kauffman Firm Surveys, KFS, financial crisis, availability of credit, capital structure, entrepreneurship, survival

JEL Classification: G21, G32, J71, L11, M13

Suggested Citation

Cole, Rebel A. and Sokolyk, Tatyana, Financing Patterns and Performance Outcomes of Women- versus Men-Owned Young Entrepreneurial Firms (June 30, 2019). Available at SSRN: https://ssrn.com/abstract=3044957 or http://dx.doi.org/10.2139/ssrn.3044957

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Tatyana Sokolyk

Brock University - Department of Finance, Operations & Information Systems ( email )

500 Glenridge Avenue
St. Catherines, Ontario L2S 3A1
Canada

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