Abstract
This chapter investigates whether gender-based discrimination exists in access to external finance by firms—due to culturally rooted prejudices and values—and whether this phenomenon has changed since the COVID-19 outbreak. To this purpose, we use firm-level data on European countries from the Enterprise Survey provided by the World Bank, together with the COVID follow-up, allowing us to consider gender in the ownership and the management of the firms. Empirical results consistently show that firms led by women are more likely to be credit constrained compared to their male-led counterparts. Particularly, since the COVID-19 outbreak, the likelihood of being credit constrained for female-led firms increases compared to the pre-COVID-19 period. The research makes a significant contribution to the existing literature: to the best of our knowledge, it is the first study to investigate the impact of gender-related variables (linked to ownership and management) on the likelihood of experiencing credit constraints by splitting the analysis period into before and since the COVID-19 outbreak. From a policy perspective, our findings underscore the need for initiatives to promote female entrepreneurship, including lower discrimination in the credit markets. This would shift the perception and expectations concerning the willingness of banks to grant women-led businesses credit, thereby reducing discouragement in the application process.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Country-group dummies are: Southern Europe, Central Europe, and Eastern Europe; Industry-group dummies are Manufacturing, Construction, Wholesale and Retail trade and Services.
References
Aristei, D., & Gallo, M. (2021). Are female-led firms disadvantaged in accessing bank credit? Evidence from transition economies. International Journal of Emerging Markets.
Alesina, A. F., Lotti, F., & Mistrulli, P. E. (2013). Do women pay more for credit? Evidence from Italy. Journal of the European Economic Association, 11(suppl_1), 45–66.
Bellucci, A., Borisov, A., & Zazzaro, A. (2010). Does gender matter in bank-firm relationships? Evidence from small business lending. Journal of Banking and Finance, 34(12), 2968–2984.
Brock, J. M., & De Haas, R. (2019). Gender discrimination in small business lending. Evidence from a lab-in-the-field experiment in Turkey, European Bank for Reconstruction and Development.
Butticé, V., & Rossi-Lamastra, C. (2020). Gender and crowdfunding: How role congruity affects the attraction of local and distant backers. Academy of Management Annual Meeting Proceedings, 2020(1).
Cavalluzzo, K., Cavalluzzo, L., & Wolken, J. (2002). Competition, small business financing, and discrimination: evidence from a new survey. Journal of Business, 75, 641–680.
Demirgüç-Kunt, A., & Maksimovic, V. (2002). Funding growth in bank-based and market-based financial systems: Evidence from firm-level data. Journal of Financial Economics, 65(3), 337–363.
ECB. (2021). Survey on the access to finance of enterprises in the euro area.
Fabowale, L., Orser, R., & Riding, A. (1995). Gender, structural factors, and credit terms between Canadian small businesses and financial institutions. Entrepreneurship Theory and Practice, 19(4), 41–65.
Galli, E., Mascia, D. V., & Rossi, S. P. S. (2020). Bank credit constraints for women-led SMEs: Self-restraint or lender bias? European Financial Management, 26(4), 1147–1188.
Mascia, D. V., & Rossi, S. P. S. (2017). Is there a gender effect on the cost of bank financing? Journal of Financial Stability, 31, 136–153.
Moro, A., Wisniewski, T. P., & Mantovani, G. M. (2017). Does a manager’s gender matter when accessing credit? Evidence from European data. Journal of Banking and Finance, 80, 119–134.
Muravyev, A., Talavera, O., & Schäfer, D. (2009). Entrepreneurs’ gender and financial constraints: Evidence from international data. Journal of Comparative Economics, 37(2), 270–286.
Wu, Z., & Chua, J. H. (2012). Second-order gender effects: The case of U.S. small business borrowing cost. Entrepreneurship Theory and Practice, 36(3), 443–463.
Zhao, Y., Xie, X., & Yang, L. (2021). Female entrepreneurs and equity crowdfunding: the consequential roles of lead investors and venture stages. International Entrepreneurship and Management Journal, 17(3), 1183–1211.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Birindelli, G., Capozza, C., Iannuzzi, A.P. (2022). COVID-19 Outbreak and Credit Constraints for Women-Led Firms. In: Paoloni, P., Lombardi, R. (eds) Organizational Resilience and Female Entrepreneurship During Crises. SIDREA Series in Accounting and Business Administration. Springer, Cham. https://doi.org/10.1007/978-3-030-89412-2_7
Download citation
DOI: https://doi.org/10.1007/978-3-030-89412-2_7
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-89411-5
Online ISBN: 978-3-030-89412-2
eBook Packages: Business and ManagementBusiness and Management (R0)