Do Credit Market Barriers Exist for Minority and Woman Entrepreneurs?

Creditor Learning and Discrimination in Lending

“…This assumption is plausible due to the legacy of racial discrimination in the U.S. and is also widely accepted in the literature (Blanchard et al 2005). I find no significant racial disparity in the loan approval rate among borrowers with long credit histories, suggesting that taste-based discrimination is not likely the dominant factor causing the observed racial disparity in lending.…”

“…Empirical tests for statistical discrimination are few in the literature, largely because the way in which statistical discrimination would manifest itself in data is not well understood theoretically (Blanchard et al 2005). While my empirical results on this regard are inconclusive, I hope this exploratory study may lead to further research on the information dynamics in lending and its implications for the fair lending policy.…”

“…Blanchard et al (2005) test for statistical discrimination in small business lending by examining the interaction between race and those variables that are arguably correlated strongly with racial stereotypes. Several recent papers try to detect statistical discrimination in labor markets by exploring the implications of employer learning for the observable effects of statistical discrimination on wage rates (Foster and Rosenzweig 1993;Neumark 1999;Farber 1996;Altonji and Pierret 2001).…”

Gender and the Business Environment for New Firm Creation

“…These include requirements for married women to obtain their husband's signature and approval for all banking transactions (South Africa and Uganda). Women can also be affected by a husband's adverse credit history, which might require his wife to repay the debt or be denied credit (South Africa) (Blanchard, Zhao, and Yinger 2005;Naidoo and Hilton 2006). Although men may also have to repay their wife's debt under the same circumstances, it is more likely that the husband has incurred previous debts.…”

Developmental venture capital: conceptualizing the field

“…In fact, however, these populations and geographies differ from each other in both the nature and causes of their capital constraints. As the literature has consistently documented, an individual's access to capital varies as a result of numerous factors, including income and educational background (Robles and Cordero-Guzma´n 2007); race (Bates 1991(Bates , 1997bBostic and Lampani 1999;Cavalluzzo and Wolken 2005;Coleman 2002Coleman , 2003Blanchflower, Levine, and Zimmerman 2003;Mitchell and Pearce 2004;Blanchard, Yinger, and Zhao 2004;Cavalluzzo, Cavalluzzo, and Wolken 2002); gender Buttner and Rosen 1988;Cavaluzzo and Cavaluzzo 1998;Walker and Joyner 1999;Coleman 2000); ethnicity (Bates 1990;Delgado 1998;Ruiz-Vargas 2000;Carvajal 2004;Mora and Davila 2006); immigrant status and country of birth (Robles and CorderoGuzma´n 2007); location of business (Robles and Cordero-Guzma´n 2007); level of attachment to the community (Chaganti and Greene 2002); and potential religious affiliation (Choi 2004).…”