Gender bias and the availability of business loans

Fay, Michael; Williams, Lesley

doi:10.1016/0883-9026(93)90005-p

Cited by 193 publications

(126 citation statements)

References 25 publications

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“…Leaving routines and similar sources of potential discrimination aside, scholars have suggested that gender differences when seeking access to finance may be explained by financiers' individual perceptions and practices, which unconsciously disadvantage and discriminate against female entrepreneurs Fraser, 2005;Verheul & Thurik, 2001). Fay and Williams (1993) initially speculated about the impact of hidden bias such as gender stereotype, which place women in an unfavorable position when seeking access to financing. More recently, empirical research has proposed that gendered construction negatively impacts female entrepreneurs' access to finance (Alsos & Ljunggren, 2016;Boden & Nucci, 2000;Carter & McNulty, 2005;Greene, Brush, Hart, & Saparito, 2001;Marlow, 2002).…”

Section: Literature Background Gender Differences In Financial Decisimentioning

confidence: 99%

“…The impact of hidden (unconscious) biases in finance distribution such as gender stereotypes has been researched, but empirically, prior studies have been limited to surveys and other methods, which restricts investigating how closed-room discussions are executed and the role and character of stereotyping in decision making (see Alsos & Ljunggren, 2016;De Bruin, Brush, & Welter, 2007;Hughes, Jennings, Brush, Carter, & Welter, 2012;Jennings & Brush, 2013). Other studies have reported on the propensity of individual decision makers or the general public to stereotype (Fay & Williams, 1993;Gupta, Goktan, & Gunay, 2014;Gupta, Turban, & Pareek, 2013), but no study has investigated stereotyping among a group of decision makers that jointly make funding decisions. This approach enables us to reveal how otherwise hidden social construction of common knowledge emerges, is expressed, founded, and anchored and thus also to understand how such shared knowledge evolves.…”

Section: Introductionmentioning

confidence: 99%

“…Research in gender shows that a growing number of scholars are focusing on female entrepreneurs' access to debt finance and venture capital (e.g., Alsos, Isaksen, & Ljunggren, 2006;Becker-Blease & Sohl, 2007;Carter & Rosa, 2005;Fay & Williams, 1993;Jennings & Brush, 2013). Several studies have shown that female entrepreneurs face more difficulties in accessing finance from traditional debt and venture capital sources compared to their male entrepreneur counterparts.…”

Section: Introductionmentioning

confidence: 99%

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Gender Stereotypes and Venture Support Decisions: How Governmental Venture Capitalists Socially Construct Entrepreneurs’ Potential

Malmström

Johansson

Wincent

2017

Entrepreneurship Theory and Practice

175

140

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In the present study, we conduct a discourse analysis on a set of longitudinal observations of government venture capitalists' decisions to identify how gender stereotypes are socially constructed and activated when assessing entrepreneurs' potential in the financial distribution of venture support. The present study finds that female entrepreneurs risk receiving significantly less venture capital, which is caused by the language and rhetoric used that relates to gender differences when funding decisions are made. We consider and discuss the implications of our results for related research about distributing venture capital and the social constructions of female and male entrepreneurs.

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Section: Literature Background Gender Differences In Financial Decisimentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Gender Stereotypes and Venture Support Decisions: How Governmental Venture Capitalists Socially Construct Entrepreneurs’ Potential

Malmström

Johansson

Wincent

2017

Entrepreneurship Theory and Practice

175

140

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“…For example, women tend to start firms in industries that are less attractive to venture capitalists, tend to have lower levels of investor interest, and seek less capital (Carter and Allen, 1997;Coleman and Robb, 2009). A variety of studies on bank loans, controlling for these factors, have not found a direct effect of gender on the ability of women to secure loans (Buttner and Rosen, 1989;Fay and Williams, 1993;Carter et al, 2007). …”

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confidence: 99%

"Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding"

Greenberg¹,

Mollick

2015

AMPROC

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Female founders seek and receive less startup capital than male entrepreneurs. One reason for this disparity is a lack of female representation among funders of startups, and a potential solution is to increase the proportion of women in decision-making roles. Both the problem and the solution implicitly rely on homophily -that women will support other women given a chance. However, a lack of clarity over when and how homophily influences individual choices makes it uncertain when better representation is actually advantageous. Using data from crowdfunding, we empirically examine whether higher proportions of female funders lead to higher success rates in capital-raising for women. We find that women outperform men, and are more likely to succeed at a crowdfunding campaign, all other things being equal. Surprisingly, this effect primarily holds for female founders proposing technological projects, a category that is largely dominated by male founders and funders. This finding stands in stark contrast to expectations concerning homophily. A laboratory experiment helps explain how this pattern might emerge and allows us to theorize about the types of choice homophily driving results. We find that a small proportion of female backers disproportionately support women-led projects in areas where women are historically underrepresented. This suggests an activist variant of choice homophily, and implies that mere representation of female funders without activism may not always be enough to overcome the barriers faced by female founders. Keywords: Sociology, homophily; crowdfunding, maker-movement *Authorship is alphabetical; both authors contributed equally in developing this paper. For useful advice we would like to thank: Matthew Bidwell, Martine Haas, Gavin Kilduff, Nathan Pettit, Lisa Leslie, Cat Turco, Ezra Zuckerman, and seminar participants at MIT, NYU, Stanford GSB, and Wharton. Funding was generously provided by the Kauffman Foundation. All the standard disclaimers apply. 2Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding ABSTRACT Female founders seek and receive less startup capital. One reason for this disparity is a lack of female representation among funders of startups, and a potential solution is to increase the proportion of women in decision-making roles. Both problem and solution presuppose homophily -that women will support other women given a chance. However, a lack of clarity over when and how homophily influences individual choices makes it uncertain when better representation is advantageous. Using data from crowdfunding, we empirically examine whether higher proportions of female funders lead to higher success rates in capital-raising for women. We find that women outperform men. Surprisingly, this effect primarily holds for female founders proposing technological projects, a category that is largely dominated by male founders and funders. This finding stands in stark contrast to expectations concerning homophily. A laboratory experiment helps explain how this pat...

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“…Hence, the decision to become self-employed looks like a necessity and a forced choice. On the other hand, as Fay and Williams (1993) stated, the greater need of women to balance work and family commitments may make entrepreneurship more appealing than employed work to some women. Entrepreneurship then also becomes a mode to balance professional and personal lives.…”

Section: Resultsmentioning

confidence: 99%