CREDIT RATIONING AND BLACK-OWNED FIRMS: IS THERE EVIDENCE OF DISCRIMINATION?

Yongjin Park () and Susan Coleman ()
Additional contact information
Yongjin Park: Connecticut College, New London, CT 06320, USA
Susan Coleman: University of Hartford, West Hartford, CT 06117, USA

Journal of Developmental Entrepreneurship (JDE), 2009, vol. 14, issue 03, 255-271

Abstract: This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.

Keywords: Black-owned firms; credit rationing; discrimination in lending (search for similar items in EconPapers)
Date: 2009
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1084946709001302
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:jdexxx:v:14:y:2009:i:03:n:s1084946709001302

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1084946709001302

Access Statistics for this article

Journal of Developmental Entrepreneurship (JDE) is currently edited by Peter Koveos

More articles in Journal of Developmental Entrepreneurship (JDE) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().