Small Business Economics

, Volume 16, Issue 4, pp 329–346 | Cite as

Start-Up Capital: "Does Gender Matter?"

  • Ingrid Verheul
  • Roy Thurik


Female and male entrepreneurs differ in the way they finance their businesses. This difference can be attributed to the type of business and the type of management and experience of the entrepreneur (indirect effect). Female start-ups may also experience specific barriers when trying to acquire start-up capital. These may be based upon discriminatory effects (direct effect). Whether gender has an impact on size and composition of start-up capital and in what way, is the subject of the present paper. The indirect effect is represented by the way women differ from men in terms of type of business and management and experience. The direct effect cannot be attributed to these differences and is called the gender effect. We use of a panel of 2000 Dutch starting entrepreneurs, of whom approximately 500 are female to test for these direct and indirect effects. The panel refers to the year 1994. We find that female entrepreneurs have a smaller amount of start-up capital, but that they do not differ significantly with respect to the type of capital. On average the proportion of equity and debt capital (bank loans) in the businesses of female entrepreneurs is the same as in those of their male counterparts.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Admiraal, P. H. (ed.), 1996, Small Business in the Modern Economy, Oxford: Basil Blackwell Publishers.Google Scholar
  2. Aldrich, H., 1989, ‘Networking Among Women Entrepreneurs', in O. Hagan, C. Rivchun and D. Sexton (eds.), Women-Owned Businesses, New York: Praeger, pp. 103-132.Google Scholar
  3. Aldrich, H., B. Rosen and W. Woodward, 1997, ‘The Impact of Social Networks on Business Foundings and Profit: A Longitudinal Study', in D. P. Moore and E. H. Buttner (eds.), Women Entrepreneurs: Moving Beyond the Glass Ceiling, London & New Delhi: Sage Publications.Google Scholar
  4. Amboise, G. d' and M. Muldowney, 1988, ‘Management Theory for Small Business: Attempts and Requirements', Academy of Management Review 13(2), 226-240.Google Scholar
  5. Audretsch, D. B. and A. R. Thurik, 2000, ‘Capitalism and Democracy in the 21st Century: From the Managed to the Entrepreneurial Economy', Journal of Evolutionary Economics 10(1), 17-34.Google Scholar
  6. Audretsch, D. B. and A. R. Thurik, 1999, ‘Entrepreneurship and Unemployment in the Knowledge Economy', in Innovation and Economic Development: The Role of Entrepreneurship and Small and Medium Enterprises, Proceedings of the 44th ICSB World Conference, Edizione Scientifiche Italiane, Cdrom.Google Scholar
  7. Audretsch, D. B. and A. R. Thurik, 2001, ‘What is New About the New Economy: Sources of Growth in the Managed and Entrepreneurial Economies', Industrial and Corporate Change, forthcoming.Google Scholar
  8. Bates, T., 1990, ‘Entrepreneur Human Capital Inputs and Small Business Longevity', The Review of Economics and Statistics 72(4), 551-559.Google Scholar
  9. Berger, A. N. and G. F. Udell, 1998, ‘The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle', Journal of Banking and Finance 22, 613-673.Google Scholar
  10. Birley, S. J., S. Cromie and A. Myers, 1991, ‘Entrepreneurial Networks: Their Emergence in Ireland and Overseas', International Small Business Journal 10(1), 237-251.Google Scholar
  11. Birley, S., C. Moss and P. Saunders, 1987, ‘Do Women Entrepreneurs Require Different Training?', American Journal of Small Business, 27-35.Google Scholar
  12. Brock, W. A. and D. S. Evans, 1989, ‘Small Business Economics’, Small Business Economics 1, 7-20.Google Scholar
  13. Brush, C. and R. D. Hisrich, 1999, ‘Women-owned Businesses: Why Do They Matter?', in Z. J. Acs (ed.), Are Small Firms Important? Their Role and Impact, Dordrecht: Kluwer Academic Publishers, pp. 111-127.Google Scholar
  14. Brush, C. G., 1992, ‘Research on Women Business Owners: Past Trends, a New Perspective and Future Directions', Entrepreneurship Theory and Practice 17(4), 5-30.Google Scholar
  15. Carland, J. W., J. C. Carland and C. D. Aby, 1989, ‘An Assessment of the Psychological Determinants of Planning in Small Businesses', International Small Business Journal 7(4), 23-34.Google Scholar
  16. Carree, M. and A. R. Thurik, 1999, ‘Industrial Structure and Economic Growth', in D. B. Audretsch and A. R. Thurik (eds.), Innovation, Industry Evolution and Employment, Cambridge University Press, pp. 86-110.Google Scholar
  17. Carree, M., A. van Stel, A. Wennekers and A. R. Thurik, 2001, ‘Economic Development and Business Ownership: An Analysis Using Data of 23 OECD Countries in the Period 1976–1996', Small Business Economics, forthcoming.Google Scholar
  18. Carter, S. and P. Rosa, 1998, ‘The Financing of Male-and Female-owned Businesses', Entrepreneurship & Regional Development 10, 225-241.Google Scholar
  19. Chittenden, F., G. Hall and P. Hutchinson, 1996, ‘Small Firm Growth, Access to Capital Markets and Financial Structure: Review of Issues and an Empirical Investigation’, Small Business Economics 8, 59-67.Google Scholar
  20. Cressy, R. C., 1996, ‘Are Business Startups Debt-Rationed?', Economic Journal 106, 1253-1270.Google Scholar
  21. Cromie, S. and S. Birley, 1990, ‘Networking by Female Business Owners in Northern Ireland', Journal of Business Venturing 7(3), 237-251.Google Scholar
  22. EIM, 1998, Kleinschalig Ondernemen 1998: Structuur en Ontwikkeling van het Nederlandse MKB, Zoetermeer.Google Scholar
  23. ENSR, 1996, The European Observatory for SME's; Fourth Annual Report, Zoetermeer: EIM.Google Scholar
  24. Evans, D. and B. Jovanovic, 1989, ‘An Estimated Model of Entrepreneurial Choice under Liquidity Constraints', Journal of Political Economy 97(4), 808-827.Google Scholar
  25. Fay, M. and L. Williams, 1993, Gender Bias and the Availability of Business Loans, Journal of Business Venturing 8, 363-376.Google Scholar
  26. Fischer, E. M., A. R. Reuber and L. S. Dyke, 1993, ‘A Theoretical Overview and Extension of Research on Sex, Gender, and Entrepreneurship', Journal of Business Venturing 8, 151-168.Google Scholar
  27. Gavron, R., M. Cowling, G. Holtham and A. Westall, 1998, The Entrepreneurial Society, London: Institute for Public Policy Research.Google Scholar
  28. Hansen, E. L. and K. R. Allen, 1992, ‘The Creation Corridor: Environmental Load and Pre-Organization Information-Processing Ability', Entrepreneurship Theory and Practice 17(1), 57-65.Google Scholar
  29. Hisrich, R. D. and C. G. Brush, 1987, ‘Women Entrepreneurs: A Longitudinal Study', in N. C. Churchill, J. A. Hornaday, B. A. Kirchhoff, O. J. Krasner and K. H. Vesper (eds.), ‘Frontiers of Entrepreneurship Research', Wellesley, MA: Babson College, pp. 187-199.Google Scholar
  30. Hisrich, R. D. and C. G. Brush, 1984, ‘The Woman Entrepreneur: Management Skills and Business Problems', Journal of Small Business Management 22(1), 30-37.Google Scholar
  31. Hisrich, R. D. and C. G. Brush, 1983, ‘The Woman Entrepreneur: Implications of Family, Educational and Occupational Experience', in Frontiers in Entrepreneurship Research, Wellesley: Babson College, pp. 255-270.Google Scholar
  32. Hofstede, G., 1991, Cultures and Organizations, London: Harper Collins Publishers.Google Scholar
  33. Holmes, S. and P. Kent, 1991, ‘An Empirical Analysis of the Financial Structure of Small and Large Australian Manufacturing Enterprises', Journal of Small Business Finance 1(2), 141-154.Google Scholar
  34. Honig-Haftel, S. and L. Martin, 1986, ‘Is the Female Entrepreneur at a Disadvantage?', Thrust: The Journal for Employment and Training Professionals 7, 49-64.Google Scholar
  35. Hughes, A. and D. J. Storey, 1994, Finance and the Small Firm, London and New York: Routledge.Google Scholar
  36. Johnson, S. and D. J. Storey, 1993, ‘Male and Female Entrepreneurs and Their Businesses', in S. Allen and C. Truman (eds.), Women in Business: Perspectives on Women Entrepreneurs, London & New York: Routledge.Google Scholar
  37. Kalleberg, A. and K. Leicht, 1991, ‘Gender and Organizational Performance: Determinants of Small Business Survival and Success', Academy of Management Journal 34, 136-161.Google Scholar
  38. Koper, G., 1993, ‘Women Entrepreneurs and the Granting of Business Credit', in Allen, S. and C. Truman (eds.), Women in Business: Perspectives on Women Entrepreneurs, London and New York: Routledge.Google Scholar
  39. Kotey, B., 1999, ‘Debt Financing and Factors Internal to the Business', International Small Business Journal 17(3), 11-29.Google Scholar
  40. Kotey, B. and G. G. Meredith, 1997, ‘Relationships among Owner/Manager Personal Values, Business Strategies and Enterprise Performance', Journal of Small Business Management 32(2), 37-64.Google Scholar
  41. Loscocco, K. A., 1991, ‘Gender and Small Business Success: An Inquiry into Women's Relative Disadvantage', Social Forces 70(1), 65-85.Google Scholar
  42. Moore, D. P. and E. H. Buttner, 1997, Women Entrepreneurs: Moving Beyond the Glass Ceiling, London and New Delhi: Sage Publications.Google Scholar
  43. Neider, L., 1987, ‘A Preliminary Investigation of Female Entrepreneurs in Florida', Journal of Small Business Management 25(3), 22-29.Google Scholar
  44. OECD, 1998, Women Entrepreneurs in Small and Medium Enterprises, OECD Conference Paris 1997.Google Scholar
  45. Olm, K., A. Carsrud and L. Alvey, 1988, ‘The Role of Networks in New Venture Funding for the Female Entrepreneur: A Continuing Analysis', in B. A. Kirchoff, W. A. Long, W. E. McMullan, K. H. Vesper and W.E. Wetzel (eds), Frontiers of Entrepreneurship Research, Wellesley, MA: Babson College.Google Scholar
  46. Riding, A. L. and C. S. Swift, 1990, ‘Women Business Owners and Terms of Credit: Some Empirical Findings of the Canadian Experience', Journal of Business Venturing 5, 327-340.Google Scholar
  47. Rosa, P., D. Hamilton, S. Carter and H. Burns, 1994, ‘The Impact of Gender on Small Business Management: Preliminary Findings of a British Study', International Small Business Journal 12(3), 25-32.Google Scholar
  48. Scott, C. E., 1986, ‘Why More Women are Becoming Entrepreneurs', Journal of Small Business Management 24(4), 37-45.Google Scholar
  49. Sexton, D. L. and N. Bowman-Upton, 1990, ‘Female and Male Entrepreneurs: Psychological Characteristics and Their Role in Gender-Related Discrimination', Journal of Business Venturing 5, 29-36.Google Scholar
  50. Stevenson, L. A., 1986, ‘Against All Odds: The Entrepreneurship of Women', Journal of Small Business Management 24(4), 30-37.Google Scholar
  51. Stigter, H. W., 1999, Vrouwelijk Ondernemerschap in Nederland 19941997, Zoetermeer: EIM.Google Scholar
  52. Thurik, A. R., 1999, ‘Entrepreneurship, Industrial Transformation and Growth', in G. D. Libecap (ed.), Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, JAI Press, pp. 29-65.Google Scholar
  53. Thurik, A. R., 1996, ‘Small Firms, Entrepeneurship and Economic Growth’, in P. H. Admiraal (ed.), Small Business in the Modern Economy, Oxford: Basil Blackwell Publishers, pp. 126-152.Google Scholar
  54. Tigges, L. M. and G. P. Green, 1992, Small Business Success Among Men and Women-Owned Firms, Rural Sociological Society Association Paper.Google Scholar
  55. Van der Wijst, N. and A. R. Thurik, 1996, ‘Determinants of Small Firm Debt Ratios: An Analysis of Retail Panel Data', in Z. J. Acs (ed.), Small Firms and Economic Growth, Volume I, The International Library of Critical Writings in Economics, Cheltenham and Brookfield: Edward Elgar Publishing Company, pp. 639-649.Google Scholar
  56. Van Uxem, F. W. and J. Bais, 1996, Het starten van een bedrijf: ervaringen van 2000 Starters, Zoetermeer: EIM.Google Scholar
  57. Watkins, J. M. and D. S. Watkins, 1983, ‘The Female Entrepreneur: Her Background and Determinants of Business Choice — Some British Data', in J. A. Hornaday, J. A. Timmons and K. H. Vesper (eds.), Frontiers of Entrepreneurship Research, Wellesley, MA: Babson College.Google Scholar
  58. Welsch, H. P. and E. Young, 1982, ‘The Information Source of Selection Decisions: The Role of Entrepreneurial Personality Characteristics’, Journal of Small Business Management 20(4), 49-57.Google Scholar
  59. Wennekers, S. and A. R. Thurik, 1999, 'Linking Entrepreneurship and Economic Growth, Small Business Economics 13(1), 27-55.Google Scholar
  60. Weston, J. F. and E. F. Brigham, 1981, Managerial Finance, 7th ed., Hinsdale: Dryden Press.Google Scholar

Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Ingrid Verheul
    • 1
  • Roy Thurik
    • 1
  1. 1.Centre for Advanced Small Business Economics,Faculty of EconomicsErasmus University RotterdamRotterdamThe Netherlands

Personalised recommendations