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Dynamics of female-owned smallest businesses in the USA

Naranchimeg Mijid (Connecticut Center for Innovative Entrepreneurs, New Britain, Connecticut, USA)

International Journal of Gender and Entrepreneurship

ISSN: 1756-6266

Article publication date: 12 June 2017

Abstract

Purpose

The purpose of this paper is to answer whether the female-owned smallest firms differ from their male-owned counterparts in terms of their success and performances; if so, whether it affects banks’ loan approval decisions.

Design/methodology/approach

The study uses the Kauffman Firm Survey – the largest and longest longitudinal data which contain 4,928 new firms that started their business in the USA in 2004. The authors use two measures of median asset values to classify firms into smallest firm category. They use multiply imputed logit estimates to predict the probability of loan approval in each category.

Findings

The results show that female-owned smallest firms have significantly lower rate of loan approval. In addition, the study finds minority women owners face double burden. However, married women have significantly higher probability of loan approval. The authors’ results are robust.

Research limitations/implications

From a public policy perspective, providing equal access to credit to women business owners, especially unmarried and/or minority women, may solve the puzzle why female-owned firms are so small.

Originality/value

Although many studies examined why businesses owned by women are typically smaller compared to men-owned firms, there exist limited studies on female-owned smallest firms and why they stay smaller. This study fills the gap in the literature by examining female-owned smallest businesses.

Keywords

Citation

Mijid, N. (2017), "Dynamics of female-owned smallest businesses in the USA", International Journal of Gender and Entrepreneurship, Vol. 9 No. 2, pp. 157-170. https://doi.org/10.1108/IJGE-10-2016-0041

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited