Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-27T02:48:09.249Z Has data issue: false hasContentIssue false
  • English
  • Français

Gender, Credit, and Firm Outcomes

Published online by Cambridge University Press:  07 December 2020

Manthos D. Delis ,
Iftekhar Hasan Open the ORCID record for Iftekhar Hasan [Opens in a new window] ,
Maria Iosifidi  and
Steven Ongena
Manthos D. Delis
Affiliation:
Montpellier Business School, Montpellier Research in Management m.delis@montpellier-bs.com
Iftekhar Hasan*
Affiliation:
Fordham University, Bank of Finland, and University of Sydney
Maria Iosifidi
Affiliation:
Montpellier Business School, Montpellier Research in Management m.iosifidi@montpellier-bs.com
Steven Ongena
Affiliation:
University of Zurich, Swiss Finance Institute, KU Leuven, and CEPR steven.ongena@bf.uzh.ch
*
ihasan@fordham.edu (corresponding author)
Get access Rights & Permissions [Opens in a new window]

Abstract

Small and micro-enterprises are usually majority-owned by entrepreneurs. Using a unique sample of loan applications from such firms, we study the role of owners’ gender in bank credit decisions and post-credit-decision firm outcomes. We find that, ceteris paribus, female entrepreneurs are more prudent loan applicants than are males because they are less likely to apply for credit or to default after loan origination. The relatively more aggressive behavior of male applicants pays off, however, in terms of higher average firm performance after loan origination.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 57 , Issue 1 , February 2022 , pp. 359 - 389
Copyright
© The Author(s), 2020. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Ongena acknowledges financial support from grant ERC ADG 2016-GA 740272 lending from the European Research Council.

References

Adams, R., and Ferreira, D.. “Women in the Boardroom and Their Impact on Governance and Performance.” Journal of Financial Economics, 94 (2009), 291–309.CrossRefGoogle Scholar
Adams, W.; Einav, L.; and Levin, J.. “Liquidity Constraints and Imperfect Information in Subprime Lending.” American Economic Review, 99 (2009), 49–84.CrossRefGoogle Scholar
Ahl, H. “Why Research on Women Entrepreneurs Needs New Directions.” Entrepreneurship Theory and Practice, 30 (2006), 595–621.CrossRefGoogle Scholar
Alesina, A. F.; Lotti, F.; and Mistrulli, P. E.. “Do Women Pay More for Credit? Evidence from Italy.” Journal of the European Economic Association, 11 (2013), 45–66.CrossRefGoogle Scholar
Alsos, G. A.; Isaksen, E. J.; and Ljunggren, E.. “New Venture Financing and Subsequent Business Growth in Men- and Women-Led Businesses.” Entrepreneurship Theory and Practice, 30 (2006), 667–686.CrossRefGoogle Scholar
Asiedu, E.; Kalonda-Kanyama, I.; Ndikumana, L.; and Nti-Addae, A.. “Access to Credit by Firms in Sub-Saharan Africa: How Relevant Is Gender?” American Economic Review, 103 (2013), 293–297.CrossRefGoogle Scholar
Baker, T.; Aldrich, H. E.; and Liou, N.. “Invisible Entrepreneurs: The Neglect of Women Business Owners by Mass Media and Scholarly Journals in the USA.” Entrepreneurship and Regional Development, 9 (1997), 221–238.CrossRefGoogle Scholar
Beck, T.; Behr, P.; and Guettler, A.. “Gender and Banking: Are Women Better Loan Officers?” Review of Finance, 17 (2012), 1279–1321.CrossRefGoogle Scholar
Bellucci, A.; Borisov, A.; and Zazzaro, A.. “Does Gender Matter in Bank-Firm Relationships? Evidence from Small Business Lending.” Journal of Banking and Finance, 34 (2010), 2968–2984.CrossRefGoogle Scholar
Berg, T. “Got Rejected? Real Effects of Not Getting a Loan.” Review of Financial Studies, 31 (2018), 4912–4957.CrossRefGoogle Scholar
Berger, A. N.; Goulding, W.; and Rice, T.. “Do Small Businesses Still Prefer Community Banks?” Journal of Banking and Finance, 44 (2014), 264–278.CrossRefGoogle Scholar
Berger, A. N., and Schaeck, K.. “Small and Medium-Sized Enterprises, Bank Relationship Strength, and the Use of Venture Capital.” Journal of Money, Credit and Banking, 43 (2011), 461–490.CrossRefGoogle Scholar
Bonfim, D.; Dai, Q.; and Franco, F.. “The Number of Bank Relationships and Borrowing Costs: The Role of Information Asymmetries.” Journal of Empirical Finance, 46 (2018), 191–209.CrossRefGoogle Scholar
Calonico, S.; Cattaneo, M. D.; and Farrell, M. H.. “On the Effect of Bias Estimation on Coverage Accuracy in Nonparametric Inference.” Journal of the American Statistical Association, 113 (2018), 767–779.CrossRefGoogle Scholar
Calonico, S.; Cattaneo, M. D.; and Titiunik, R.. “Robust Nonparametric Confidence Intervals for Regression-Discontinuity Designs.” Econometrica, 82 (2014), 2295–2326.CrossRefGoogle Scholar
Carter, S.; Shaw, E.; Lam, W.; and Wilson, F.. “Gender, Entrepreneurship, and Bank Lending: The Criteria and Processes Used by Bank Loan Officers in Assessing Applications.” Entrepreneurship Theory and Practice, 31 (2007), 427–444.CrossRefGoogle Scholar
Cattaneo, M. D.; Jansson, M.; and Ma, X.. “Manipulation Testing Based on Density Discontinuity.” Stata Journal, 18 (2018), 234–261.CrossRefGoogle Scholar
Cattaneo, M. D.; Titiunik, R.; and Vazquez-Bare, G.. “Inference in Regression Discontinuity Design Under Local Randomization.” Stata Journal, 16 (2016), 331–367.CrossRefGoogle Scholar
Chen, J.; Leung, W.; and Goergen, M.. “The Impact of Board Gender Composition on Dividend Payouts.” Journal of Corporate Finance, 43 (2016), 86–105.CrossRefGoogle Scholar
Coleman, S. “The Role of Human and Financial Capital in the Profitability and Growth of Women-Owned Small Firms.” Journal of Small Business Management, 45 (2007), 303–319.CrossRefGoogle Scholar
Conroy, T., and Weiler, S.. “Does Gender Matter for Job Creation? Business Ownership and Employment Growth.” Small Business Economics, 47 (2016), 397–419.CrossRefGoogle Scholar
Danilo, M., and Rossi, S.. “Is There a Gender Effect on Cost of Financing?” Journal of Financial Stability, 31 (2017), 136–153.Google Scholar
Dawson, C., and Henley, A.. “Gender, Risk, and Venture Creation Intentions.” Journal of Small Business Management, 53 (2015), 501–515.CrossRefGoogle Scholar
Dean, H.; Larsen, G.; Ford, J.; and Akram, M.. “Female Entrepreneurship and the Metanarrative of Economic Growth: A Critical Review of Underlying Assumptions.” International Journal of Management Reviews, 21 (2019), 24–49.CrossRefGoogle Scholar
Delis, M.; Fringuellotti, F.; and Ongena, S.. “Credit and Income.” Working Paper, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3319789 (2019).CrossRefGoogle Scholar
Delis, M. D., and Papadopoulos, P.. “Mortgage Lending Discrimination Across the U.S.: New Methodology and New Evidence.” Journal of Financial Services Research, 56 (2019), 341–368.CrossRefGoogle Scholar
Dobbie, W.; Liberman, A.; Paravisini, D.; and Pathania, V.. “Measuring Bias in Consumer Lending.” NBER Working Paper No. 24953 (2018).CrossRefGoogle Scholar
European Commission. Statistical Data on Women Entrepreneurs in Europe. Brussels, Belgium: European Commission (2014).Google Scholar
Fang, L. H., and Huang, S.. “Gender and Connections among Wall Street Analysts.” Review of Financial Studies, 30 (2017), 3305–3335.CrossRefGoogle Scholar
Farinha, M. L. A., and Santos, J. A. C.. “Switching from Single to Multiple Bank Lending Relationships: Determinants and Implications.” Journal of Financial Intermediation, 11 (2002), 124–151.CrossRefGoogle Scholar
Francis, B.; Hasan, I.; and Wu, Q.. “The Impact of CFO Gender on Bank Loan Contracting.” Journal of Accounting, Auditing and Finance, 28 (2013), 53–78.CrossRefGoogle Scholar
Huang, J., and Kisgen, D. J.. “Gender and Corporate Finance: Are Male Executives Overconfident Relative to Female Executives?” Journal of Financial Economics, 108 (2013), 822–839.CrossRefGoogle Scholar
Imbens, G. W., and Lemieux, T.. “Regression Discontinuity Designs: A Guide to Practice.” Journal of Econometrics, 142 (2008), 615–635.CrossRefGoogle Scholar
Iyer, R., and Puri, M.. “Understanding Bank Runs: The Importance of Depositor-Bank Relationships and Networks.” American Economic Review, 102 (2012), 1414–1445.CrossRefGoogle Scholar
Karavitis, P.; Kokas, S.; and Tsoukas, S.. “Gender Board Diversity and the Cost of Bank Loans.” Working Paper, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3453680 (2019).CrossRefGoogle Scholar
Kaya, O. “SME Financing in the Euro Area. New Solutions to an Old Problem.” Deutsche Bank Research (2014).Google Scholar
Lee, D. S., and Lemieux, T.. “Regression Discontinuity Designs in Economics.” Journal of Economic Literature, 48 (2010), 281–355.CrossRefGoogle Scholar
Muravyev, A.; Talavera, O.; and Schäfer, D.. “Entrepreneurs’ Gender and Financial Constraints: Evidence from International Data.” Journal of Comparative Economics, 37 (2009), 270–286.CrossRefGoogle Scholar
Niederle, M., and Vesterlund, L.. “Do Women Shy Away from Competition? Do Men Compete Too Much?” Quarterly Journal of Economics, 122 (2007), 1067–1101.CrossRefGoogle Scholar
Ongena, S., and Popov, A.. “Gender Bias and Credit Access.” Journal of Money, Credit and Banking, 48 (2016), 1691–1724.CrossRefGoogle Scholar
Organization for Economic Cooperation and Development/European Union. Policy Brief on Women’s Entrepreneurship . Luxembourg: Publications Office of the European Union (2017).Google Scholar
Piacentini, M. “Women Entrepreneurs in the OECD: Key Evidence and Policy Challenges” Working Paper No. 147, Organization for Economic Cooperation and Development (2013).Google Scholar
Qi, S.; Ongena, S.; and Cheng, H.. “When They Work with Women, Do Men Get All the Credit?” Working Paper No. 18-01, Swiss Finance Institute (2018).CrossRefGoogle Scholar
Roper, S., and Scott, J. M.. “Perceived Financial Barriers and the Start-Up Decision: An Econometric Analysis of Gender Differences Using GEM Data.” International Small Business Journal, 27 (2009), 149–171.CrossRefGoogle Scholar
Schwartz-Ziv, M. “Gender and Board Activeness: The Role of a Critical Mass.” Journal of Financial and Quantitative Analysis, 52 (2017), 751–780.CrossRefGoogle Scholar
Sila, V.; Gonzalez, A.; and Hagendorff, J.. “Women on Board: Does Boardroom Gender Diversity Affect Firm Risk?” Journal of Corporate Finance, 36 (2016), 26–53.CrossRefGoogle Scholar
Stefani, M. L., and Vacca, V. P.. “Credit Access for Female Firms: Evidence from a Survey on European SMEs.” Working Paper No. 176, Bank of Italy (2013).CrossRefGoogle Scholar