Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data

Stephen Roper and Jonathan Scott

MPRA Paper from University Library of Munich, Germany

Abstract: Although accessing finance is key to the foundation of any business, particular concerns have been expressed about the ability of UK women-owned firms to obtain external finance. In this paper we use an econometric approach to explore the effect of perceptions of financial barriers to start-up on the start-up decision itself. Our analysis is based on the Global Entrepreneurship Monitor (GEM) UK 2004 database. Standardising for a range of individual characteristics, we find that women are around 7.4 per cent more likely to perceive financial barriers to business start-up than men. As perceptions of financial barriers are linked negatively to the start-up decision, stronger perceptions of financial barriers among women are having a disproportionate effect on women’s start-up decisions. However, being female also has an additional negative effect on the start-up decision, not linked to financial barriers. Policy responses, therefore, need to take into account the demand-side with the aim of countering the more negative perceptions of start-up finance among potential women entrepreneurs. Mentoring and confidence building programmes are obvious possibilities. We also find support for the value of university and college-based work experience programmes. [PUBLISHED ABSTRACT]

Keywords: Finance; entrepreneurship; start-up; SME; gender; women (search for similar items in EconPapers)
JEL-codes: D14 G3 J16 J23 L26 M13 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ent and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

Published in International Small Business Journal 27.2(2009): pp. 149-171

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