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

Stephen Roper, Jonathan Scott

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    115 Citations (Scopus)
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    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 article 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. Standardizing for a range of individual characteristics, we find that women are around 7.4 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 confidencebuilding programmes are obvious possibilities.We also find support for the value of university and college-based work experience programmes.
    Original languageEnglish
    Pages (from-to)149-171
    JournalInternational Small Business Journal
    Volume27
    Issue number2
    DOIs
    Publication statusPublished - 1 Apr 2009

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