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The purpose of this paper is to investigate ways to mitigate gender bias in entrepreneurial financing. The authors aim to unveil the role entrepreneurs’ gender played in formal and informal financing under Chinese context, as well as the moderating role corporate social responsibility (CSR) played in such relationships.

This paper adopts ANOVA test and multiple regression method to empirically examine the relationship of entrepreneurs’ gender, formal financing, informal financing and CSR with second hand data from The Eleventh Private Enterprise Survey covering a sample of firms across China.

The results demonstrate that comparing to start-ups led by men, start-ups led by women are less likely to get either formal or informal financing. The results also suggest that CSR negatively moderates the impact entrepreneurs’ gender has on formal financing but not on informal financing.

By focusing on both formal and informal financing, the research of gender’s effects on firms’ financing has been extended. Also, by proving that CSR can help to mitigate gender bias in formal financing, contribution has also been made to the research field of gender financing. This paper contributes to the CSR literature by sorting out another benefit CSR has in new venture financing. Overall, findings of this study deepen the existing understanding of gender issues in the context of entrepreneurial financing.

Finance is crucial to boosting agricultural development in developing countries. This paper aims to investigate the effects of rural formal and informal financial access on agricultural technical efficiency (TE) in China.

Based on the survey data of demonstrative family farms in Langxi county, Anhui province and Wuhan city, Hubei province in central China in 2017, this research assesses agricultural TE by using a three-stage DEA model. It adopts the tobit model to evaluate the effects of formal and informal financial access on TE, and to explore the heterogeneous effects by types, management states and scales. It uses the OLS regression and PSM method to check the robustness, and applies the IV-Tobit method to solve the endogeneity. The authors apply the mediation effect model to explore the channels through which financial access impacts TE.

Family farms' average TE reaches 13.9%, which shows much room for improvement under the given technical conditions and constant inputs. The research confirms the advantage of formal financial access in raising TE relative to informal financial access. The heterogeneous analysis documents more prominent effects of formal financial access on enhancing TE of aquaculture, hybrid, demonstration and large farms. The mediating effect model reveals that the enhancing TE effect of formal financial access derives from improved machinery investment and family labor division rather than land circulation.

The research clarifies finance into formal and informal finance. The results have considerable policy implications for rural financial policies in China.

The purpose of this paper is to empirically investigate how women entrepreneurs in Tanzania assess their accessibility to different external financial sources. The aim is further to discuss financial preferences among this group of entrepreneurs.

The study is based on a unique database consisting of 114 firms, obtained by a questionnaire during 2009-2010. Differences between mean values on perceptions of financial sources were tested via a paired samples t-test.

Overall, the empirical results provide support for the hypothesis that the sampled women entrepreneurs perceive semi-formal capital, such as loans from MFIs, SACCOS, ROSCAS and VICOBA, as the most accessible external capital. Governmental subsidies are ranked second, followed by informal capital, such as loans from family, friends and investors. As expected, loans from formal banks are ranked as the least accessible financing alternative. However, there are strong indications that the entrepreneurs in our study, if given a choice, would prefer external capital from formal sources, rather than semi-formal or informal capital.

The authors suggest that the formal banks work to find ways to lower agency costs and thereby work for an inclusion of women entrepreneurs, and for the semi-formal financial actors to improve financial services in ways that better serve the entrepreneurs.

The knowledge about attitudes and preferences concerning financial solutions among women entrepreneurs in developing countries is very limited. Results from this study is therefore important, as it adds to previous understanding, especially as this particular group of entrepreneurs have the potential to play an important role in the development of their regions.

The purpose of this paper is to investigate the determinants of financing preference of micro and small enterprises (MSEs) whilst distinguishing a broader range of financing sources beyond what is typically the case within the corporate finance literature.

Under the framework of ordinal logistic regression, the paper also tests whether there is evidence of hierarchical preference ordering as predicted by pecking order theory (POH) using field survey data for 2009.

The authors relate that new enterprises are more likely to prefer low cost and less risky or less formal financing such as internal or bootstrap finances. However, as the enterprise gets established or matures, its capacity to seek formal financing increases, thereby becoming more likely to prefer or being in a higher category of formal financing. While the paper affirms the POH, it is argued that this order is a consequence of severe persistent constraints other than sheer preference. The findings further reveal that, microentrepreneur's and MSE's‐specific level socio‐economic characteristics such as owner's education or financial literacy status, households tangible assets, ownership structure, enterprise size, as well as sensitivity to high interest rates in the credit market, to be important determinants of either past (start‐up), present or future financing preference.

The main value of this paper is to analyse the determinants of financing preference of MSEs within the context of rural financial market (RFM) from a developing country perspective.

Despite the noticeable consequences of disruptive financial innovations, access to finance remains a major factor inhibiting the sustainable-growth potentials of young micro-entrepreneurs in informal settings. This study examines the determinants of financing options among micro-entrepreneurs in informal settings. Specifically, the study seeks to establish whether credit history, income, asset, gender, awareness and network capability have effects on formal and informal financing options among micro-entrepreneurs in informal settings.

This article uses the survey research design and administers a structured questionnaire among 300 purposively selected micro-entrepreneurs within the University of Lagos, Nigeria. Only 291 completed questionnaires are retrieved. This article also uses the multiple regression analysis to estimate the empirical model and test the research hypotheses respectively.

This article establishes that: (1) credit history and assets-based financing are significant determinants of formal financing options among young micro-entrepreneurs in informal settings, (2) gender and network capability are significant determinants of informal financing options among young micro-entrepreneurs in informal settings and (3) awareness is significant of both formal and informal financing options among young micro-entrepreneurs in informal settings.

This article examines the determinants of financing option among young micro-entrepreneurs in informal settings. Specifically, the study seeks to establish whether credit history income asset gender awareness and network capability have effects on formal and informal financing options among micro-entrepreneurs in informal settings.

The purpose of this study is to investigate the effects of nature and a range of institutional sources of start-up finance on micro and small enterprises' (MSEs) productivity growth in Ghana.

Using a unique non-farm household enterprise survey data from Ghana, this paper estimated TFP or Solow residual as a proxy for MSEs' productivity growth as well as other for robustness checks.

After controlling for firm-level characteristics such as size, age, ownership type, etc. the study finds that debt finance was positively associated with productivity growth, while financing from donation or charity did not. Second, this paper found significant positive associations between a more formal financing source such as formal and semi-formal financing sources and MSE's productivity growth. This finding was robustly confirmed by manager's growth perception. Further, compared to internal finance, external financing sources were found to be positively associated with productivity growth – indicating complementarities among all external financing sources.

Further research will be needed to validate these results, particularly using enterprise ongoing finance or working capital rather than start-up capital.

The study contributes to the finance literature by studying the impact of nature and institutional financing sources on MSEs' productivity growth in the African context.

The purpose of this paper is to explore the relationship between low-wealth business founders in the USA and external startup funding. Specifically, the authors test whether a founders’ low personal net worth is correlated with a lower probability of acquiring funding from outside sources during the business creation process.

The authors use a double-hurdle Cragg model to jointly estimate: first, the decision to acquire external financing; and second, the amount received. The sample is the US-based Panel Study of Entrepreneurial Dynamics II (PSED II). The PSED II tracks business founders attempting to start ventures from 2005 to 2012.

Receipt of outside financing during business formation is largely determined by the business founder’s personal finances (controlling for human capital, venture type and industry, and whether money was sought in the first place). A higher household net worth results in larger amounts of external funding received. Low-wealth business founders, therefore, are less likely to get external funds, and they receive lower amounts when they do. The disparity between low-and high-wealth business founders is more pronounced for formal, monitored sources of external financing such as bank loans.

Because the study eliminates survivor bias by using a nationally representative sample of business founders who are in the venture creation process, the findings apply to both successful business founders and those who disengaged during the business creation process. The authors offer insights into the sources and amounts of external funds acquired by individuals across all levels of wealth. The authors accomplish this by disaggregating business founders into wealth quintiles. The study demonstrates the importance of personal wealth as a factor in acquiring external startup financing compared to human capital, industry, or personal characteristics.

If the ability to acquire external funding is significantly constrained, the quality of the opportunity and the skill of the business founder may be less a determinant of success at creating a new business as prior studies have suggested. Consequently, entrepreneurship (as measured by business formation) as a path toward upward, socioeconomic mobility will be afforded only to those individuals with sufficient financial endowments at the outset.

Unlike prior studies, the data used are not subject to survivor bias or an underrepresentation of self-employment. The statistical model jointly estimates acquisition of financing and the amount received. This resolves selection and censoring problems. Finally, the dependent variables directly measure liquidity constraints in the context of business formation, that is, before a new venture is created. Prior research contexts have typically studied existing businesses, and are therefore not true examinations of conditions affecting business creation.

Informal associations are typical features of farm and non-farm ventures especially within rural communities. Owing to the informality of these associations, members of the groups usually evolve strategies to cope with different kinds of economic and social shocks such as the COVID-19 pandemic or unexpected economic recessions. Accordingly, entrepreneurship and non-farm business development in rural areas require massive finance input, which this group largely lacks owing to agrarian activities which is the main source of revenue. Therefore, to inform rural development policies, this chapter draws on the interrelationships that exist between finance options (including formal, informal and social networks) and small business development. Using the World Bank Living Standards Measurement Survey – Integrated Surveys on Agriculture (LSMS-ISA), the analytics identifies informal financing and social networks as leading alternatives to formal financing option in rural businesses. Therefore, we suggest that the government institutions recognise and formalise informal finance systems. This will not only aid access to government interventions and programmes, but foster collaborations with existing formal institutions and investors for sustainable rural business financing.

This study aims to investigate whether social capital mediates the impact of financial capital on business performance in Cameroon.

The study uses quantitative data collected from 370 small businesses in Yaoundé and Douala in Cameroon. All businesses in the sample are formally registered and are in the services sector. A structural equation modelling (SEM) approach is used for the analysis.

Structural and relational capital constraints are significant mediators of formal and informal finance. The magnitude effects of relational capital are the largest, underlining information's importance in resolving small and medium enterprises’ (SMEs') financial constraints. In addition, the effect of informal finance constraints on business performance is larger in magnitude, confirming the substantial impact of informal finance on SME operations.

The paper confirms that relational and structural social capital are vital in business. However, the study did not investigate the disaggregated effects of these dimensions of social capital. Furthermore, how SMEs transition between formal and informal finance could provide further understanding of the role of social capital. A disaggregated and panel data set would help to provide additional insights.

Social capital emerges as a pivotal factor in enhancing SME access to finance. The results, therefore, confirm the relevance of a holistic approach to easing financial capital constraints for SMEs and enabling small businesses to connect more to various stakeholders to amplify business performance. In addition, the findings identified some intervention points for the governments in Cameroon as it seeks to use SMEs as its pivot for development and to catapult itself to emerging economy status in its Cameroon 2035 vision.

The value of the study lies in assessing the mediating effect of cognitive, relational and structural social capital constraints on business performance and comparing the effect of formal and informal financial constraints on business performance.

The purpose of this paper is to test the effect of informal finance and trade credit on the performance of private firms.

Based on a survey to private firms in 19 cities, the paper empirically tests the promoting effects of informal finance and trade credit on the performance of private firms in China.

It was found that informal finance and trade credit have positive effects on private firms' performance measured by ROA. The net income reinvestment rate of private firms is positively related to whether or not the firm adopts informal financing or trade credit financing. A private firm having limited access to formal finance is more inclined to rely on self‐funds and is more limited by financing choices. Informal financing and trade credit can relieve the tension of cash flow chain but cannot solve the financing constraints. The empirical results also show that bank credit is still not the main financing choice for private firms and has not yet played a promoting role in private firms' performance and growth. Informal finance is more important to promote performance in manufacturing industry, while trade credit is more effective in wholesale and trading industry. The results show the coexistence viability of informal financing channels and formal financial institutions in China.

The policy implication is the Chinese Government should take careful steps to regulate informal financing sources.

After some theoretical literature, such as Lin and Sun, this paper explores for the first time the effect of informal financing channels on the performance of private firms.