Journal
JOURNAL OF CORPORATE FINANCE
Volume 71, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jcorpfin.2020.101782
Keywords
Gender discrimination; Credit demand; Credit access; Credit performance; Financing
Categories
Funding
- FEF-IEAF
- Spanish Government (AEI/FEDER-UE) [FEM2017-83006-R]
- USPCEU-Mutua Madrilena [060516-USPMM-02/17]
- Spanish Government [ECO2015-65826-P, ECO2017-85356-P]
- Research Award Antonio Dionis Soler 2019
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The study shows that female entrepreneurs are less likely to ask for a loan, and if they do, the likelihood of obtaining one in the founding year is lower compared to male peers in the same industry. However, women-led companies are less likely to default after receiving a loan in the founding year.
We use a sample of over 80,000 Spanish companies started by a sole entrepreneur between 2004 and 2014, and distinguish between male and female entrepreneurs demand for credit, credit approval ratio, and credit performance. We find that female entrepreneurs who start a business are less likely to ask for a loan. Of the female entrepreneurs requesting a credit, the probability of obtaining one in the founding year is significantly lower than their male peers in the same industry. This lower credit access disappears over the subsequent years, once the company has a track record of profits and losses. We also observe that women-led companies that receive a loan in the founding year are less likely to default as compared to men-led companies. This superior performance disappears for subsequent years, coinciding with the disappearance of the lower credit access. Taking all these results together, we rule out both taste-based discrimination and statistical discrimination in the credit industry, and point to the possible presence of double standards which might be a consequence of implicit (unconscious) discrimination.
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