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IJGE
4,3 Women’s access to SME finance
in Australia
Andrew van Hulten
266 Centre for Strategic Economic Studies, Victoria University,
Melbourne, Australia
Received 14 September 2011
Revised 11 December 2011 Abstract
Accepted 11 January 2012 Purpose – The purpose of this paper is to test whether Australian female and male entrepreneurs
differ in their growth aspirations and demand for finance; denial, discouragement and financial
constraint rates; and sources of finance.
Design/methodology/approach – This paper applies logistic regression techniques to data drawn
from a comprehensive survey of Australian small- and medium-sized businesses, which was
conducted in 2010.
Findings – After controlling for a wide range of firm, owner and risk characteristics, female
entrepreneurs are found to have lower growth aspirations than males but do not differ in their demand
for business finance. Gender does not influence the probability of reporting denial, discouragement or
financial constraint. Females and males do not differ significantly in the types of finance that they use.
Research limitations/implications – The online survey had a low response rate.
Originality/value – First, the paper tests the proposition that gender mediates demand for finance
whilst controlling for a wide range of firm, owner and risk variables. Second, the paper tests whether
female entrepreneurs are more likely than males to be financially constrained, that is, to have foregone
viable investment opportunities due to inadequate access to finance. In doing so, it endeavours to
reconcile the financial discrimination and financial constraint literatures. Third, the paper tests
whether gender produces its effects in interaction with owners’ migration status.
Keywords Financial constraints, Discouraged borrowers, Financial discrimination,
Small to medium-sized enterprises, Gender, Australia, Entrepreneurialism
Paper type Research paper

1. Introduction
Women entrepreneurs are an important and growing source of income and employment
in Australia. Female entrepreneurs are more likely than males to be sole-traders, to run
small firms (, 4 employees) and to work part-time, and are less likely to earn high
incomes (. $1,300 per week) (Table I). Further, Australian female entrepreneurs are
more likely than males to be involved in the retail and personal services sectors (Table II).
These patterns reflect gender disparities in wages, wealth and occupational histories as
well as the household division of labour (Brush et al., 2006, 2010).
Within the broad literature on female entrepreneurship, significant attention
is paid to women’s ability to access external business finance. Gender-based
differences in access to finance may explain why female-owned firms tend to be
smaller and concentrated in highly competitive sectors with low entry barriers
International Journal of Gender and
Entrepreneurship
Vol. 4 No. 3, 2012 The author would like to thank the Victorian Employers’ Chamber of Commerce and Industry
pp. 266-288 (VECCI), the Chamber of Commerce and Industry Western Australia, the New South Wales
q Emerald Group Publishing Limited
1756-6266
Business Chamber, SA Business, the Tasmanian Chamber of Commerce and Industry and the
DOI 10.1108/17566261211264154 Australia Chamber of Commerce and Industry for (non-financial) support for the survey effort.
(Carter and Marlow, 2006; Brush et al., 2010). If women are unable to access business Women’s access
finance on equitable terms, the growth of their firms may be constrained, with flow-on to SME finance
effects for economic growth. Unequal access to finance may also indicate
discrimination against women by financial institutions, raising social justice concerns.
The empirical record, however, is mixed as to the role that gender plays in
determining access to business finance. Studies of established firms provide a cloudy
picture of whether female entrepreneurs are more likely than men to be denied finance, to 267
be discouraged from applying for finance, or to face strict credit conditions. Further, the
most robust empirical studies emerge from the USA, the UK and Canada. Studies from
elsewhere in the world are needed to better understand how national context influences
the social construction of gender and its role in determining access to business finance
(Shaw et al., 2010).
This paper provides a recent Australian perspective on the issue of women’s access to
business finance. It makes four main contributions to the literature. First, using data

a Place of birtha b
Hours worked Born in Born Firm type
Earns . $1,300 Full-time Part-time Australia overseas Incorporated Unincorporated Table I.
p.w2 (%) (%) (%) (%) (%) (%) (%) Comparison of female
and male entrepreneurs
Males 24.4 80 20 70 30 42 58
Females 13.7 39 61 74 26 40 60 by weekly earnings,
hours worked,
Source: aCharacteristics of Small Business Survey (20 employees or less), 2005-2006, Australian place-of-birth and
Bureau of Statistics (2008); bCensus 2006, Australia Bureau of Statistics (2006) firm type

Percentage of total business owners

Industry of employment (ANZSIC 2006) Male Female

Agriculture, forestry and fishing 8.5 8.1

Mining 0.4 0.2
Manufacturing 8.2 6.9
Electricity, gas, water and waste services 0.4 0.2
Construction 24.4 7.9
Wholesale trade 4.2 4.2
Retail trade 8.1 13.5
Accommodation and food services 3.9 6.9
Transport, postal and warehousing 7.0 3.5
Information media and telecommunications 1.3 1.2
Financial and insurance services 2.8 2.6
Rental, hiring and real estate services 2.2 2.7
Professional, scientific and technical services 10.9 10.8
Administrative and support services 4.2 5.7
Public administration and safety 0.6 0.5
Education and training 1.5 4.3
Health care and social assistance 4.0 10.3
Arts and recreation services 1.4 2.0
Other services 5.9 8.5 Table II.
Total business owners 100 100 Industry of employment
by gender of business
Source: Census 2006, Australia Bureau of Statistics (2006) owners, 2006
IJGE from a comprehensive survey of Australian businesses, the paper tests the proposition
4,3 that gender affects growth aspirations and, thereby, the demand for finance. Second,
it tests whether gender plays a role in explaining denial and discouragement rates
in Australia while controlling for a wide range of firm, owner and risk variables.
Third, in a more novel contribution, the paper employs a self-reported measure of
financial constraint to test whether gender influences the probability that business
268 investment is constrained by inadequate access to external finance. Finally, the paper
tests whether female migrant entrepreneurs face particular difficulties accessing
business finance. This group of entrepreneurs is the subject of increased research
attention internationally (Low, 2004; Collins and Low, 2010; Baycan-Levant, 2010;
Halkias et al., 2011).
The paper is comprised of four remaining sections. Section 2 reviews the existing
literature that explores the role that gender plays in determining access to business
finance and identifies some important knowledge gaps. Section 3 explains the survey
methodology, its limitations, and the econometric techniques used. Section 4 reports the
findings of several econometric models, which test for gender-based differences in
(i) growth aspirations; (ii) the demand for finance; (iii) denial and discouragement rates;
(iv) self-reported financial constraints; and (v) the use of different types of finance.
Section 5 concludes by placing the empirical findings in their broader context and raises
some questions for future research.

2. Literature review
A significant amount of research explores whether males and females differ in terms of
their access to start-up capital. Studies from the USA (Carter et al., 1997; Coleman, 2000;
Treichel and Scott, 2006; Coleman and Robb, 2009), the UK (Carter and Rosa, 1998; Roper
and Scott, 2009; Sena et al., 2010), and The Netherlands (Verheul and Thurik, 2001)
demonstrate that women tend to start their firms with less external capital[1]. Studies of
start-up firms are important because they demonstrate that the relationship between
gender and systemic disadvantage affects the level of start-up capital, the sector-of-entry
and, thereby, subsequent firm performance.
Another group of studies focus on established firms and test whether gender
influences the probability of being denied credit by a financial institution. These studies
focus on the thorny issue of financial discrimination. Several US studies that control for
a wide range of firm, owner and risk variables find no significant relationship between
gender and the probability of credit denial (Cavalluzzo and Cavalluzzo, 1998;
Blanchflower et al., 2003; Cavalluzzo and Wolken, 2005; Treichel and Scott, 2006; Cole
and Mehran, 2011). However, Cavalluzzo et al. (2002) find that females are denied credit
more often in concentrated markets, suggesting Becker-type discrimination. In Canada,
Fabowale et al. (1995) and Riding and Swift (1990) find no difference between men and
women in loan and line of credit denial rates. Muravyev et al. (2009) provide strong
evidence that gender plays an important role in mediating access to finance in
developing countries. Using data from the World Bank’s Business Environment and
Enterprise Performance Survey 2005 (BEEPS), which covers 34 developed and
developing countries, they find that female-owned businesses are less likely to get
bank credit than their male counterparts.
Perceived and actual discrimination may discourage established entrepreneurs
from applying for business finance. Studies from the USA (Cavalluzzo et al., 2002;
Robb and Wolken, 2002; Cole and Mehran, 2011), the UK (Fraser, 2004; Freel et al., 2012) Women’s access
and Australia (Watson et al., 2009) find that women are no more likely than men to be to SME finance
discouraged from applying for business finance. Using a US data set for 1987-2001,
Treichel and Scott (2006) find that women are more likely than men not to apply for
business loans, although the issue of discouragement is not addressed directly.
Higher borrowing costs or stricter lending conditions can also impede established
entrepreneurs. In the USA, Coleman (2000) finds that women tend to pay higher 269
interest rates on business loans than men but Cavalluzzo and Cavalluzzo (1998) and
Blanchflower et al. (2003) find no such relationship. In Canada, Riding and Swift (1990)
and Haines et al. (1999) also find no evidence that women pay higher interest rates.
In Italy, Alesina et al. (2008) find women pay higher interest rates than men but
Bellucci et al. (2010) do not. In a cross-country sample containing developing countries,
Muravyev et al. (2009) find that women tend to pay more for credit than men.
In terms of credit conditions, Coleman (2000) finds that US female entrepreneurs are
more likely than males to post collateral to secure credit. For Italian businesses during
2004-2006, Bellucci et al. (2010) find that female owners face tighter non-price contract
terms than males (i.e. collateral requirements). In Canada, Fabowale et al. (1995) and
Haines et al. (1999) find no difference between men and women in terms of the conditions
attached to business finance, while Riding and Swift (1990) find some evidence of this for
lines of credit.
With regards to credit volumes, Treichel and Scott (2006) find that women in the US
receive smaller loans than men. Agier and Szafarz (2011) find a similar effect for
customers of a Brazilian micro-finance institution. Coleman and Robb (2009) find that
female entrepreneurs raise less external debt than men in the second and third years of
firm life.
There is significant evidence that female and male entrepreneurs differ in the types of
finance that they use. Women are less likely than men to source external finance in the
form of bank loans (Fay and Williams, 1993; Riding and Swift, 1990; Carter et al., 1997;
Coleman, 2000, 2002; Treichel and Scott, 2006), venture capital (Brush et al., 2002;
Carter et al., 2003; Greene et al., 2001) and equity (Orser et al., 2006). Female entrepreneurs
are more likely than men to rely on personal and family sources of finance (Haynes and
Haynes, 1999; Coleman, 2000; Arenius and Autio, 2006). Eriksson et al. (2009), however,
find that women in Finland are more likely than men to use equity from current owners
but no more or less likely to access bank debt.
Most quantitative studies of established firms are supply-side focused, in large part,
because they are oriented towards testing for financial discrimination. Some researchers
point out that observed differences in financing patterns – debt volumes, the propensity
to apply for finance, levels of start-up capital, etc. – may reflect gender-based differences
in the demand for finance. This raises the possibility that observed gender differences
are a matter of choice as well as the outcome of systemic disadvantage or financial
discrimination. It also means that women entrepreneurs are likely, on average, to be
better credit risks than men (Cliff, 1998)[2].
Few empirical studies, however, test directly the role that gender plays in the demand
for finance. Demand-side arguments rely on broad propositions about gender-based
differences in growth aspirations and risk aversion, which receive some empirical
support. A set of studies by psychologists and experimental economists find that
women are more risk averse than men (Croson and Gneezy, 2009). In Germany,
IJGE Caliendo et al. (2009) find that women’s higher level of risk aversion results in lower rates
4,3 of self-employment. Several Australian studies suggest that women are more risk averse
than men in their use of business finance (Watson, 2002; Watson and Robinson, 2003;
Watson and Newby, 2005; Watson et al., 2009). Another group of studies find that
women tend to place less emphasis than men on rapid firm growth and assess the
success of their firms against a broader set of criteria (Rosa et al., 1996; Cliff, 1998; Orser
270 and Hogarth-Scott, 2002; Wiklund et al., 2003; Carter et al., 2003). Some studies, however,
find that gender has no influence on growth aspirations (Kolvereid, 1992; Verheul and
Van Mil, 2011). Whether these observed differences are the outcome of biology,
socialization, the household division of labour, etc. remains unresolved (Morris et al.,
2006). Nevertheless, if gender influences risk taking behaviour and growth aspirations,
this can be expected to flow through to the demand for business finance.
Another shortcoming of the existing quantitative literature is that it tends to study
gender in isolation, despite widespread recognition that gender produces its effects in
interaction with other socio-cultural factors (Collins et al., 1995; Marlow and Patton,
2005; Carter and Marlow, 2006). An emerging research stream focuses on female migrant
entrepreneurs (Low, 2004; Collins and Low, 2010; Halkias et al., 2011). This research calls
for closer engagement between the gender, migrant and ethnic entrepreneurship
literatures (Waldinger et al., 1990; Light and Rosenstein, 1995; Ram et al., 2001). Some
recent studies test quantitatively whether ethnic and migrant entrepreneurs face
particular difficulties accessing finance, with mixed results (Fraser, 2009; Bruder et al.,
2011; Albareto and Mistrulli, 2011). However, more research is required to test how
gender, migrant status and ethnicity interact to influence access to business finance.
Such research is particularly important in the developed world where studies that focus
on women or migrants in isolation tend to find few statistically significant effects[3].
It may be the case, however, that important sub-groups, such as Asian migrant females
in Australia (Collins and Low, 2010), face unique difficulties accessing business finance
that are overlooked by previous studies. Put differently, different migrant communities
have unique social constructions of gender which may influence their attitudes towards,
and access to, external business finance.
Overall, the existing empirical record provides a cloudy picture of the role of gender.
The most consistent findings are that women tend to borrow less money in volume
terms, start their firms with less capital and favour different forms of finance than men.
The majority of studies suggest that gender does not have a robust influence on interest
rates, lending conditions and denial and discouragement rates. Gender appears to have
its strongest negative effects in developing countries.
This paper addresses several gaps in the literature. First, while studies recognize that
gender may influence the demand for finance, few studies test this proposition directly.
Gender-based differences in risk aversion and growth aspirations, which receive some
empirical support, are “one step removed” from the question of demand for finance.
This paper addresses this gap, albeit partially, by testing whether an entrepreneur’s
gender has an independent effect on:
.
the priority given to firm growth; and
. the importance of access to business finance.

Unlike many existing demand-side studies, we control for a wide range of firm, owner
and risk characteristics.
 Second, supply-side studies rarely control for investment opportunities. Existing Women’s access
studies rarely test directly whether the investment plans of female-owned firms are to SME finance
constrained by inadequate access to finance. This paper tests this proposition by
employing a self-assessed measure of financial constraint. Self-reported measures of
financial constraint have been advocated by recent studies in the financial constraint
literature (Beck et al., 2006; Mohnen et al., 2008; Savignac, 2008; Campello et al., 2010).
Self-reported measures implicitly control for the (perceived) investment opportunities 271
available to firm owners.
Third, the paper tests, albeit in a limited way, whether migrant females differ from
other groups in terms of their access to external business finance. In a high immigration
country such as Australia, this is an important and growing group of entrepreneurs.
Finally, we add a recent Australian perspective to the financial discrimination
literature. Several important studies have been carried out in the Australian context
(Watson, 2002; Watson and Robinson, 2003; Watson and Newby, 2005; Watson et al.,
2009). However, due to the limitations of official data sources, these studies have used
fewer control variables than studies from the USA, UK and Canada (Barrett, 2006).
Studies from different national contexts are required to better understand the
mechanisms through which gender mediates access to finance (Brush et al., 2010;
Shaw et al., 2010).

3. Data and methodology

The survey was carried out in collaboration with the Chambers of Commerce and
Industry in five Australian states: Western Australia, New South Wales, Victoria,
South Australia and Tasmania[4]. These states account for approximately 77 per cent
of Australia’s total GDP. The data was collected between July and December 2010.
The survey was conducted through an online instrument, which was embedded in a
university web domain. Survey respondents were recruited through e-mail invitations.
A random sample of e-mail contacts was purchased from two market research firms.
The response rate for the survey was approximately 5.6 per cent[5]. The completion
rate for the survey was 73 per cent and a total of 955 complete responses were received.
Of these, 783 responses were received from owner-managers of firms with less than
200 employees. This is the sub-sample used for this study. Of this sub-sample,
596 (76.1 per cent) respondents were male, 187 (23.9 per cent) were female and
42 (5.4 per cent) were female and born overseas.
Low response rates are common for online surveys (Campello et al., 2010). Low
response rates, however, create the possibility of non-response error. Nevertheless, the
dataset contains important information about the determinants of between group
differences in access to business finance, which are the focus of this study. Unless it is
assumed that non-response rates differ according to firm type – in this case, female-
versus male-owned firms – low response rates are unlikely to influence the direction
(or sign) of gender-based differences in access to finance.
The research methodology has some other limitations. First, the survey data does not
indicate whether male or female respondents were sole- or joint-owners of their firms.
Ideally, 100 per cent male-owned firms should be compared to 100 per cent female-owned
firms (Carter and Marlow, 2006; Barrett, 2006). Second, the survey was conducted only in
English. As a result, entrepreneurs with low English proficiency are likely to be
under-represented. Finally, to identify the independent effects of gender, a wide range of
IJGE firm and owner characteristics are used as control variables. While this is standard
4,3 practice in the financial discrimination literature, it renders systemic disadvantage – of
which gender is both a cause and an effect – an exogenous variable (Carter et al., 2007;
Shaw et al., 2010). Nevertheless, this methodology allows us to test whether the
Australian financial system exacerbates systemic (or inherited) disadvantage along
gender lines.
272
Analytical framework
Logistic regression is used to test for gender-based differences in access to finance. All
models were run in STATA (V11.0) using a robust variance estimator approach that
deals with heteroskedastic errors, has low bias for small sample sizes and assumes
conservative confidence intervals for coefficient estimates. Table III summarizes our
eight dependent variables and our suite of control variables.

4. Analysis of results
Descriptive statistics
Table IV compares the mean responses of female and male entrepreneurs across
a range of variables. It shows that firms with female owners are smaller and
younger than firms owned by men. They are also more likely to be home-based and in
the services sector. These patterns are similar to those seen in other developed
countries (Fabowale et al., 1995; Heilbrunn, 2004; Marlow and Patton, 2005; Carter and
Marlow, 2006; Fairlie and Robb, 2009; Orser et al., 2009; Brush et al., 2010). Female
owners are less likely than males to earn revenue from international or inter-state sales,
which suggests geographically restricted markets (Orser et al., 2009). Female owners
are more likely than men to have a university-level education or a formal qualification
in business management. Women owners are less likely than men to have more than
ten years experience as a business manager. Management experience augments
entrepreneurs’ human and social capital (Boden and Nucci, 2000; Carter and Marlow,
2006; Shaw et al., 2010).
In terms of performance and risk profiles, female owners are slightly less likely than
males to report that their firm was profitable in recent years and slightly more likely to
report moderate or high debt levels. Female owners are less likely than males to have
made late debt repayments in the previous five years or to have a debt with the
Australian Tax Office (ATO).
The bottom of Table IV compares females and males across a range of financial
variables. It shows that female owners are less likely than males to have applied recently
for finance to fund business expansion (32.1 per cent vs 38.9 per cent) and more likely to
have not applied for finance because they assumed an application would be unsuccessful
(21.4 per cent vs 18.1 per cent). Of those who applied for finance, women are less likely
than men to report at least one unsuccessful attempt (33.3 per cent vs 42.7 per cent).
In terms of sources of finance, women are less likely than men to have a line of credit
(48.7 per cent vs 50.8 per cent), to have accessed a loan from a “Big 4” bank (39.6 per cent
vs 46.5 per cent) or to have accessed equity funding from existing (20.9 per cent vs
22.7 per cent) or new owners (3.2 per cent vs 4.7 per cent). Women are more likely than
men to report borrowing money from friends and family (27.3 per cent vs 25.2 per cent).
Finally, women are less likely than men to report being financially constrained, that is, to
report passing up attractive business opportunities due to inadequate access to finance
Dummy dependent variables (yes ¼ 1)
Women’s access
GROWTH Firm reports that firm growth is the “most important” firm priority to SME finance
FINANCE Firm strongly agrees with statement: “Access to external finance is
essential for the firm to meet its long-term goals”
DISCOURAGED Firm did not apply for finance to fund business expansion in the last
two years because it was assumed that an application would be
unsuccessful
UNSUCCESSFUL Firm reports at least one unsuccessful attempt to access external finance
273
in the last two years (restricted to sub-sample of firms that applied for
finance, n ¼ 292)
CONSTRAINT Firm reports passing up attractive business opportunities in the
previous two years because it could not access external finance
BANKLOAN Owner reports using loan from bank or other financial institution in the
past
INFORMAL Owner reports using finance from family and friends in the past
OWNERS Owner reports using equity from existing owners in the past
Independent variables
Gender-related variables
Gender Female (1 ¼ yes)
Migrant Born overseas (1 ¼ yes)
Migrant £ female Interaction of “gender” and “migrant” variables
Firm characteristics
Employees 0-4 *, 5-19, 20 or more, other (not available or “prefer not to say”)
Revenue $0-$500,000 *, $500,000-$1 million, $1-$3 million, $3-$10 million, more
than $10 million, other (not available, “do not know”, “prefer not to say”)
Accountant Firms uses accountant to prepare its financial statements (yes ¼ 1)
Sole proprietorship Firm is a sole proprietorship (yes ¼ 1)
Home-based Firm is home-based (yes ¼ 1)
Industry Mining and agriculture, manufacturing *, construction and utilities,
wholesale and retail, business services, personal and public services, not
available
Firm age 0-2 years, 3-5 years, 5-10 years, more than 10 years *
Inter-state sales Firm sells goods or services interstate (yes ¼ 1)
Non-exporter Firm generates no revenue from exports (yes ¼ 1)
Owner variables
Owner age Less than 30 years, 31-40 years, 41-50 years, 51-60 years, over 60 years *
Experience-owner Years of experience as business owner: 0-5 years, 6-9 years, 10-19 years,
20 or more *
Experience-manager Years of experience as business manager: 0-5 years, 6-9 years, 10-19
years, 20 or more *
Education Highest level qualification: school or vocational training *, university
level, other (prefer not to say, NA)
Business qualification Formal qualification related to business management (yes ¼ 1)
Risk and demand variables
Debt levels None or NA *, “low” or “moderate”, “high” or “close to insolvent”
Late debt repayments Firm made late debt repayments in the last five years? (yes ¼ 1)
Bankruptcy Firm-owner has declared bankruptcy in the past? (1 – yes)
Profitable 2006-2009 Firm was profitable between 2006 and 2009 (1 – yes)
Profitable 2009-2010 Firm was profitable between 2009 and 2010 (1 – yes)
Home ownership Owner-manager owns own home (1 – yes) Table III.
Personal assets Owner has used personal assets as collateral to secure business finance Description of dependent
(1 – yes) and independent
(continued) variables
IJGE Investment in high tech Firm owner moderately or strongly agrees with the statement: “The
4,3 important firm must constantly invest in high-tech equipment and new processes
to remain competitive”
Investment in R&D Firm owner moderately or strongly agrees with the statement: “The
important firm must invest heavily in research and development or intellectual
property to grow”
274 Growth priority Priority given to growth: “not a priority” or “minor priority” (or “wants
to scale back”) *, “an important priority”, “the most important priority”
Notes: For dependent variables with several categories, omitted variables are marked with an
Table III. asterisk

(34.8 per cent vs 44.0 per cent). The econometric analysis tests whether some of these
differences are statistically significant after applying a large suite of control variables.
Table V summarises the results of the logistic regression analysis using GROWTH
and FINANCE as dependent variables. GROWTH has a value of 1 if the firm owner
states that firm growth is the most important firm priority. This model tests the
proposition that male and female owners differ in their growth aspirations. FINANCE
has a value of 1 if the firm owner strongly agrees that “access to external finance is
essential if the firm is to achieve its long-term goals”. This model tests, in a general
sense, the proposition that gender has an independent influence on the demand for
external finance. We report our model results as marginal effects (dy/dx), that is, the
change in predicted probability caused by an explanatory variable changing its value
from 0 to 1 (i.e. from male to female) while all other explanatory variables take their
sample mean values.
The results indicate that female owners are less likely than males to view firm
growth as the most important priority. Being female reduces the predicted probability
of citing firm growth as the most important priority by 0.066 ( p , 0.1), which is a large
marginal effect. This finding is consistent with previous studies (Rosa et al., 1996; Cliff,
1998; Orser and Hogarth-Scott, 2002; Wiklund et al., 2003; Carter et al., 2003). The
model also demonstrates that owners younger than 30 years and firms with high R&D
requirements are significantly more likely than other firms to cite growth as the most
important priority.
Gender-based differences in growth aspirations are expected to flow through to
differences in demand for business finance. The FINANCE model, however, indicates
no significant differences between female and male entrepreneurs in the importance
that they place on access to external business finance. This result suggests that
gender-based differences in growth aspirations do not necessarily flow through to
differences in the demand for finance. The model also shows that the owners of young
firms with high growth aspirations are most likely to view access to external business
finance as important. Finally, owners with high debt levels are most likely to view
access to finance as important, which most likely captures roll-over risk.
Female migrant entrepreneurs are less likely than other groups to report access to
business finance as important ( p , 0.01). Possibly, this group is less likely than other
groups to pursue business models that depend on access to external finance. If so, this
raises important questions about how the social construction of gender within
particular migrant communities influences women’s business plans and, thereby, their
 Women’s access
Male Female
Variable Description (%) (%) to SME finance
Firm characteristics
Employees % with 0-4 employees 42.3 52.9
Revenue % with revenue of less $500,000 p.a. 35.9 53.5
Industry % in service sector 43.0 50.8 275
Age % of firms less than five years old 16.8 21.9
Home-based firm % home-based 21.6 25.1
Sole proprietorship % yes 15.9 24.1
Accountant % yes 86.7 90.4
Sells goods and services interstate % yes 54.5 47.1
No revenue from exports % with no revenue from exports 75.2 82.4
Importance of high-tech investment % that moderately or strongly agree with 58.9 55.6
statement: “The firm must constantly
invest in high-tech equipment and new
production processes to remain
competitive”
Importance of R&D investment % that moderately or strongly agree with 41.3 43.9
statement: “The firm must invest in
research and development or intellectual
property in order to grow”
Owner characteristics
Experience as business owner % , 10 years 32.9 47.6
Experience as business manager % , 10 years (including none) 23.2 47.6
Level of education % Bachelor degree or higher 45.1 48.7
Business management qualification % yes 29.0 33.7
Home ownership % that own home 74.7 73.3
Personal assets as collateral % that have used personal assets as 67.6 61.5
collateral
Performance and risk variables
Profitability 2006-2009 % of firms that were profitable 2006-2009 74.5 72.2
Debt with Australian Tax Office (ATO) % yes 26.2 21.9
Debt levels % of firms with moderate or high levels 41.1 42.2
of debt or that are close to insolvency
Late debt repayment in last five years % that have made late debt repayments 23.7 20.9
in the last five years
Importance of finance and growth
Priority given to firm growth % that say firm growth is “the most 19.6 15.5
important priority”
% that say firm growth is “an important 45.5 43.9
priority”
Importance of access to finance % that strongly agree with statement: 35.6 31.0
“Access to finance is essential for firm to
meet its long-term goals”
Access to finance variables
Did the firm seek external finance in the % yes 38.9 32.1
last two years to fund business % no, because the firm did not need 43.0 46.5
expansion? external finance
% no, because it was assumed that any 18.1 21.4 Table IV.
attempt to raise external finance would be Descriptive statistics
unsuccessful comparing male and
(continued) female owners
IJGE Male Female
4,3 Variable Description (%) (%)

Unsuccessful application in last two % with at least 1 unsuccessful 42.7 33.3

years? application (of those that applied for
finance in the last two years, n ¼ 292)
Line of credit or overdraft facility % that currently have line of credit or 50.8 48.7
276 overdraft facility
Sources of finance used in the past % loan from “Big 4” bank 46.5 39.6
% loan from other financial institutions 20.5 20.9
% loan from family and friends 25.2 27.3
(inc. re-mortgaging family home)
% equity from external/new owners 4.7 3.2
% equity from existing owners 22.7 20.9
Over the last two years, did the firm pass % of firm responding yes (to any) 44.0 34.8
up attractive business opportunities % firms responding yes because lender 26.7 20.3
because it could not access external conditions were too strict (e.g. collateral
finance? requirements)
Table IV. Total observations 596 187

demand for external business finance. Unfortunately, the data set does not contain
detailed information about ethnicity and country-of-origin.
Table VI summarises the results of the models using DISCOURAGED,
UNSUCCESSFUL and CONSTRAINT as dependent variables. DISCOURAGED
takes a value of 1 if a firm owner reports not applying for business finance in the
previous two years because they assumed an application would be unsuccessful.
UNSUCCESSFUL takes a value of 1 if a firm owner reports at least one unsuccessful
application in the previous two years[6]. Variants of DISCOURAGED and
UNSUCCESSFUL are commonplace in the financial discrimination literature.
CONSTRAINT takes a value of 1 if a firm owner reports passing up business
opportunities in the previous two years due to inadequate access to finance.
The results of the DISCOURAGED model (column 1, Table VI) indicate that female
owners are no more likely than male owners to report being discouraged. Female
migrant entrepreneurs are no more likely than other groups to report discouragement.
Owners of firms with high debt, who have made late debt repayments and view R&D
as important are more likely to report discouragement whilst owners who own their
own home are less likely to do so. This result is consistent with recent studies showing
that discouraged borrowers often exhibit high levels of credit risk (Han et al., 2009;
Freel et al., 2012). Third, owners with the highest growth aspirations are the most likely
to report discouragement, raising the possibility that a small group of ambitious
entrepreneurs with low or moderate credit risks have given up trying to secure external
finance.
The results of the UNSUCCESSFUL model (column 2, Table VI) indicate no
significant differences between female and male owners in the likelihood of being
denied finance. No effect is found for migrant females. Unsurprisingly, late debt
repayments and a history of owner bankruptcy are significantly correlated with the
probability of denial. Larger (. $3 million revenue p.a.) and profitable firms are
significantly less likely than other firms to report denial. Owners that see firm growth
 Dependent: GROWTH Dependent: FINANCE
Women’s access
Y(predicted) ¼ 0.17 Y(predicted) ¼ 0.29 to SME finance
dy/dx p-value dy/dx p-value

Gender and migration

Gender (1 – female) 20.066 * 0.06 0.040 0.472
Migrant (1 – born overseas) 0.031 0.457 0.060 0.294
Migrant £ female 20.014 0.854 2 0.200 * * * 0.000 277
Firm characteristics
Employees, 5-19a 20.009 0.795 0.117 * * 0.039
Employees, 20-199 0.024 0.750 0.130 0.210
Employees, other 0.304 0.237 0.222 0.329
Revenue PA ($), 500K-1,000Kb 20.067 * * 0.046 2 0.080 0.144
Revenue PA ($), $1-$3 million 20.084 * * 0.022 2 0.055 0.386
Revenue PA ($), $3-$10 million 20.045 0.382 0.086 0.382
Revenue PA ($), . $10 million 20.084 0.210 0.190 0.168
Revenue PA ($), other 20.118 * * 0.015 2 0.124 0.146
Uses accountant 0.073 * 0.053 0.125 * * 0.013
Sole-proprietor 20.016 0.667 2 0.029 0.605
Home-based firm 20.053 0.102 2 0.024 0.677
Industry, mining and agriculturec 0.126 0.505 0.220 0.151
Industry, construction and utilities 0.005 0.933 0.024 0.760
Industry, wholesale, retail, transport 0.012 0.78 2 0.070 0.159
Industry, business services 0.01 0.811 2 0.127 * * 0.010
Industry, personal and public services 0.036 0.642 0.025 0.802
Industry, other 0.002 0.981 2 0.099 0.189
Firm age, ,2 years 0.093 0.354 0.358 * * * 0.004
Firm age, 3-5 years 0.055 0.346 0.106 0.170
Firm age, 5-10 yearsd 0.106 * * 0.032 0.048 0.430
Firm sells goods or services inter-state 0.008 0.802 2 0.062 0.137
Firm generates no revenue from exports 0.007 0.848 2 0.047 0.349
Firm owner characteristics
Owner age, less than 30 yearse 0.343 * * 0.043 2 0.091 0.406
Owner age, 31-40 years 0.025 0.701 0.009 0.921
Owner age, 41-50 years 0.001 0.989 0.033 0.651
Owner age, 51-60 years 0.000 1.000 2 0.016 0.800
Experience as owner, 0-5 yearsf 0.003 0.962 2 0.057 0.504
Experience as owner, 6-10 years 0.034 0.589 2 0.004 0.963
Experience as owner, 10-19 years 20.017 0.699 0.012 0.839
Experience as business manager, 0-5 yearsf 20.022 0.701 2 0.019 0.840
Experience as business manager, 6-9 years 20.038 0.451 0.032 0.694
Experience as business manager, 10-19 years 20.012 .785 0.011 0.859
Education, university levelg 20.012 0.692 0.067 0.118
Education, other 0.206 0.267 0.107 0.602
Business management qualification 0.035 0.303 0.006 0.896
Risk and demand variables
Debt level, “low” or “moderate”h 0.037 0.342 0.141 * * 0.010
Debt level, “high” or “close to insolvency” 0.083 0.244 0.391 * * * 0.000
Late debt repayment (1 – yes) 20.009 0.782 0.157 * * * 0.002
Owner declared bankruptcy in past 0.050 0.523 0.182 * 0.117 Table V.
Profitable, 2006-2009 (1 – Yes) 20.036 0.293 2 0.041 0.370 Results of logistic
Profitable, 2009-2010 (1 – yes) 0.006 0.861 2 0.049 0.289 regression using
Owner-manager owns home 20.013 0.702 2 0.055 0.250 GROWTH and FINANCE
(continued) as dependent variables
IJGE Dependent: GROWTH Dependent: FINANCE
4,3 Y(predicted) ¼ 0.17 Y(predicted) ¼ 0.29
dy/dx p-value dy/dx p-value

Used personal assets as collateral 20.014 0.669 0.114 * * * 0.009

Investment in high tech important 20.008 0.799 0.110 * * * 0.007
278 Investment in R&D important 0.035 * * * 0.276 2 0.021 0.610
Firm growth important priority 0.191 * * * 0.000
Firm growth most important priority 0.399 * * * 0.000
Pseudo R 2 0.075 0.221
a
Notes: Significant at: *10, * *5 and * * *1 per cent levels; omitted: 0-4 employees, bomitted:
, $500,000, comitted: manufacturing, domitted: more than ten years, eomitted: over 60 years, fomitted:
Table V. more than 20 years, gomitted: lower than university level education, homitted: no debt (or NA)

as an important priority are significantly more likely than less ambitious owners to
report denial, although this may reflect a greater number of finance applications by
this group.
Using CONSTRAINT as the dependent variable (column 3, Table VI), no significant
differences between female and male owners are found. Although insignificant at the
10 per cent level ( p ¼ 0.110), the estimated coefficient for the gender variable is
negative. No significant effect is found for female migrant entrepreneurs.
The CONSTRAINT model produces some other interesting results. High debt
levels, late debt repayments, a history of bankruptcy, and lower levels of owner
experience increase the predicted probability of reporting financial constraint.
Compared to firms older than ten years, firms five to ten years are significantly more
likely to report financial constraint. Owners who owned their own homes – an
important form of collateral for small business lending in Australia – are significantly
less likely to report financial constraint. These results correspond to previous findings
and theoretical expectations (Beck et al., 2006). Finally, owners with high growth
aspirations are most likely to report financial constraint, raising the possibility that
there is a small cohort of ambitious entrepreneurs in Australia with low or moderate
risk profiles that are financially constrained.
Finally, gender’s influence on the types of finance used by a firm was analysed
(Table VII). Gender has no significant effect on the probability that a firm has secured a
loan from a “Big 4” bank (BANK), borrowed money from family or friends
(INFORMAL) or sourced equity investments from existing owners (OWNERS) in the
past. Female migrants do not differ from other groups in terms of their sources of
finance. However, migrant entrepreneurs, more broadly, are significantly more likely
than non-migrants to source finance from family and friends, which confirms previous
findings (Bates, 1994, 1997; Collins, 2000; Smallbone et al., 2003; Ram et al., 2003;
Hussain and Matlay, 2007; Irwin and Scott, 2010). Older firms are significantly more
likely to have used all three types of finance, reflecting their longer histories of
financing. Interestingly, firms that use an accountant are significantly more likely to
have secured a bank loan in the past. Finally, larger firms are most likely to have
accessed a bank loan while firms with revenue under $500,000 p.a. are most likely to
have accessed finance through family and friends and injections of owner equity.
 Dependent: Dependent:
DISCOURAGED UNSUCCESSFUL Dependent: CONSTRAINT
Y(predicted) ¼ 0.154 Y(predicted) ¼ 0.389 Y(predicted) ¼ 0.396
dy/dx p-value dy/dx p-value dy/dx p-value

Gender and migration

Gender (1 – female) 0.026 0.493 20.075 0.453 20.093 0.110
Migrant (1 – born overseas) 0.033 0.452 0.135 0.175 0.099 0.109
Migrant £ female 2 0.031 0.603 0.218 0.111 20.010 0.929
Firm characteristics
Employees, 5-19a 2 0.005 0.900 0.032 0.751 0.023 0.691
Employees, 20-199 2 0.052 0.336 0.019 0.903 0.094 0.365
Employees, other 2 0.056 0.662 omittedb omitted 0.237 0.218
Revenue PA ($), 500K-1,000Kc 0.012 0.774 20.103 0.317 0.051 0.452
Revenue PA ($), $1-$3 million 2 0.055 0.174 20.139 0.232 20.018 0.809
Revenue PA ($), $3-$10 million 2 0.066 0.195 20.265 * * * 0.006 20.113 0.195
Revenue PA ($), . $10 million 2 0.092 * 0.069 20.199 0.016 20.077 0.542
Revenue PA ($), other 2 0.069 0.237 20.338 * * * 0.000 20.230 * * * 0.008
Uses accountant 0.051 0.169 20.064 0.609 0.015 0.835
Sole-proprietor 2 0.030 0.379 0.081 0.507 20.016 0.796
Home-based firm 0.041 0.300 20.091 0.386 0.057 0.361
Industry, mining and agricultured 2 0.021 0.892 0.343 0.246 0.131 0.414
Industry, construction and utilities 2 0.023 0.641 0.220 0.101 0.097 0.296
Industry, wholesale, retail, transport 0.038 0.402 0.006 0.951 0.042 0.512
Industry, business services 0.041 0.345 0.081 0.445 20.054 0.381
Industry, personal and public services 0.100 0.215 0.360 * * 0.040 0.146 0.161
Industry, other 0.093 0.297 20.013 0.929 0.104 0.350
Firm age, ,2 years 0.066 0.432 0.033 0.864 0.149 0.236
Firm age, 3-5 years 2 0.079 * * 0.034 0.065 0.591 0.062 0.436
Firm age, 5-10 yearse 0.065 0.166 0.158 0.129 0.205 * * * 0.002
Firm sells goods or services inter-state 0.022 0.453 0.064 0.447 20.023 0.623
Firm generates no revenue from exports 2 0.027 0.451 0.036 0.699 20.127 * * 0.018
Firm owner characteristics
Owner age, less than 30 yearsf 2 0.027 0.748 20.130 0.548 0.152 0.334
(continued)

DISCOURAGED,
regression using
Results of logistic

UNSUCCESSFUL and

dependent variables
CONSTRAINT as
279

Table VI.
to SME finance
Women’s access
 4,3

280
IJGE

Table VI.
Dependent: Dependent:
DISCOURAGED UNSUCCESSFUL Dependent: CONSTRAINT
Y(predicted) ¼ 0.154 Y(predicted) ¼ 0.389 Y(predicted) ¼ 0.396
dy/dx p-value dy/dx p-value dy/dx p-value

Owner age, 31-40 years 20.030 0.595 2 0.285 * * * 0.008 2 0.077 0.365
Owner age, 41-50 years 20.022 0.653 2 0.154 0.253 2 0.022 0.773
Owner age, 51-60 years 20.004 0.917 2 0.126 0.257 2 0.044 0.507
Experience as owner, 0-5 yearsg 0.042 0.595 0.017 0.926 0.030 0.783
Experience as owner, 6-10 years 20.041 0.465 2 0.049 0.745 0.071 0.458
Experience as owner, 10-19 years 0.018 0.718 2 0.144 * 0.277 0.084 0.242
Experience as business manager, 0-5 yearsg 20.040 0.580 2 0.161 0.267 2 0.064 0.497
Experience as business manager, 6-9 years 0.001 0.980 0.167 0.302 2 0.104 0.200
Experience as business manager, 10-19 years 20.034 0.444 0.198 0.166 2 0.019 0.780
Education, university levelh 20.008 0.793 0.015 0.853 2 0.013 0.790
Education, other 0.032 0.835 0.112 0.827 0.184 0.264
Business management qualification 20.038 0.195 2 0.017 0.840 0.026 0.623
Risk and demand variables
Debt level, “low” or “moderate”i 0.041 0.271 2 0.301 0.102 0.231 * * * 0.000
Debt level, “high” or “close to insolvency” 0.148 * 0.066 0.052 0.807 0.459 * * * 0.000
Late debt repayment (1 – yes) 0.062 * 0.083 0.332 * * * 0.000 0.228 * * * 0.000
Owner declared bankruptcy in past 0.140 0.156 0.363 * 0.065 0.401 * * * 0.000
Profitable, 2006-2009 (1 – yes) 20.004 0.885 0.100 0.223 2 0.124 * * 0.019
Profitable, 2009-2010 (1 – yes) 20.083 * * 0.024 2 0.095 0.31 2 0.085 * 0.097
Owner-manager owns home 20.083 * * 0.017 2 0.086 0.310 2 0.141 * * * 0.006
Used personal assets as collateral 20.029 0.355 2 0.041 0.698 0.007 0.898
Investment in high tech important 20.031 0.305 0.011 0.902 2 0.012 0.808
Investment in R&D important 0.080 * * 0.011 2 0.058 0.516 0.099 * * 0.041
Firm growth important priority 0.075 * * 0.020 0.238 * * * 0.006 0.171 * * * 0.000
Firm growth most important priority 0.076 0.115 0.078 0.496 0.228 * * * 0.000
Pseudo R 2 0.124 0.230 0.215
Notes: Significant at: *10, * *5 and * * *1 per cent levels; aomitted: 0-4 employees, bvariable omitted and six observations removed because perfectly
predicts dependent variable, comitted: ,$500,000, domitted: manufacturing, eomitted: more than ten years, fomitted: over 60 years, gomitted: more than
20 years, homitted: lower than university level education, iomitted: no debt (or NA)
 Dependent: BANK Dependent: INFORMAL Dependent: OWNERS
Y(predicted) ¼ 0.533 Y(predicted) ¼ 0.226 Y(predicted) ¼ 0.233
dy/dx p-value dy/dx p-value dy/dx p-value

Gender and migration

Gender (1 – female) 20.062 0.273 0.015 0.738 2 0.021 0.642
Migrant (1 – born overseas) 20.040 0.485 0.114 * * 0.029 0.012 0.979
Migrant £ female 0.052 0.644 2 0.046 0.565 0.125 0.018
Firm characteristics
Employees, 5-19a 20.017 0.771 0.023 0.619 2 0.029 0.485
Employees, 20-199 20.223 * * 0.017 2 0.013 0.862 2 0.048 0.466
Employees, other Omitb Omit Omitb Omit Omitb Omit
Revenue PA ($), 500K-1,000Kc 0.032 0.632 2 0.047 0.303 0.064 0.224
Revenue PA ($), $1-$3 million 0.025 0.736 2 0.068 0.167 0.031 0.568
Revenue PA ($), $3-$10 million 0.194 * * 0.023 2 0.027 0.679 0.126 0.157
Revenue PA ($), . $10 million 0.276 * * * 0.004 2 0.062 0.510 2 0.076 0.395
Revenue PA ($), other 0.066 0.626 2 0.029 0.749 2 0.151 * * 0.018
Uses accountant 0.170 * * * 0.005 0.004 0.941 2 0.047 0.358
Sole-proprietor 20.022 0.709 0.010 0.823 2 0.160 * * * 0.000
Home-based firm 20.131 * * 0.022 0.015 0.733 2 0.057 0.177
Industry, mining and agricultured 0.283 0.115 0.073 0.705 0.172 0.384
Industry, construction and utilities 0.175 * * 0.025 0.047 0.508 0.206 * * 0.022
Industry, wholesale, retail, transport 0.053 0.402 0.016 0.757 0.101 * 0.087
Industry, business services 0.111 * 0.062 0.031 0.517 0.115 0.029
Industry, personal and public services 0.128 0.177 2 0.113 * 0.064 0.009 0.926
Industry, other 0.076 0.481 2 0.053 0.506 0.002 0.988
Firm age, ,2 years 20.032 0.738 2 0.118 * * 0.038 2 0.142 * * 0.027
Firm age, 3-5 years 20.048 0.500 0.006 0.912 2 0.019 0.744
Firm age, 5-10 yearse 20.063 0.275 2 0.045 0.313 2 0.043 0.318
Firm sells goods or services inter-state 0.023 0.623 2 0.050 0.164 0.002 0.949
Firm generates no revenue from exports 0.172 * * * 0.001 0.009 0.841 2 0.017 0.693
Firm owner characteristics
Owner age, less than 30 yearsf 20.112 * * 0.455 2 0.074 0.518 0.080 0.639
Owner age, 31-40 years 20.010 0.910 0.160 * 0.072 0.168 * 0.083
(continued)

Results of logistic

INFORMAL and

dependent variables
regression using BANK,

OWNERS as
Table VII.
281
to SME finance
Women’s access
 4,3

282
IJGE

Table VII.
Dependent: BANK Dependent: INFORMAL Dependent: OWNERS
Y(predicted) ¼ 0.533 Y(predicted) ¼ 0.226 Y(predicted) ¼ 0.233
dy/dx p-value dy/dx p-value dy/dx p-value

Owner age, 41-50 years 20.074 0.312 0.061 0.306 0.141 * * 0.034
Owner age, 51-60 years 20.060 0.364 0.007 0.900 0.127 * * 0.028
Experience as owner, 0-5 yearsg 20.055 0.574 0.016 868 2 0.113 * 0.057
Experience as owner, 6-10 years 20.110 0.224 2 0.047 0.506 2 0.022 0.740
Experience as owner, 10-19 years 0.023 0.740 0.018 0.742 0.001 0.974
Experience as business manager, 0-5 yearsg 20.061 0.530 2 0.017 0.822 2 0.011 0.892
Experience as business manager, 6-9 years 0.048 0.579 0.029 0.700 2 0.050 0.400
Experience as business manager, 10-19 years 20.033 0.622 0.003 0.961 2 0.061 0.184
Education, University levelh 20.121 * * * 0.007 2 0.013 0.724 0.047 0.199
Education, other 0.150 0.377 2 0.137 0.118 2 0.153 * * 0.044
Business management qualification 0.051 0.294 0.056 0.198 0.115 * * * 0.009
Risk and demand variables
Debt level, “low” or “moderate”i 0.149 * * * 0.008 0.131 * * * 0.003 2 0.017 0.710
Debt level, “high” or “close to insolvency” 0.249 * * * 0.000 0.213 * * 0.019 0.020 0.760
Late debt repayment (1 – yes) 0.078 0.111 0.138 * * * 0.002 0.048 0.273
Owner declared bankruptcy in past 20.019 0.871 0.107 0.281 0.282 * * 0.014
Profitable, 2006-2009 (1 – yes) 0.104 * * 0.041 2 0.014 0.731 2 0.081 * 0.062
Profitable, 2009-2010 (1 – yes) 0.013 0.797 2 0.070 * 0.080 2 0.016 0.698
Owner-manager owns home 20.096 * * 0.047 2 0.079 * 0.059 2 0.047 0.265
Used personal assets as collateral 0.202 * * * 0.000 0.067 * 0.075 2 0.041 0.297
Investment in high tech important 0.079 * 0.089 0.015 0.678 0.004 0.916
Investment in R&D important 20.004 0.934 0.068 * 0.07 0.077 * * 0.045
Firm growth important priority 20.066 0.17 0.026 0.471 2 0.022 0.541
Firm growth most important priority 20.203 * * * 0.000 2 0.035 0.437 0.034 0.439
Pseudo R 2 0.142 0.119 0.111
Notes: Significant at: *10, * *5 and * * *1 per cent levels; aomitted: 0-4 employees, bvariable omitted and 13 observations removed because perfectly
predicts dependent variable, comitted: ,$500,000, domitted: manufacturing, eomitted: more than ten years, fomitted: over 60 years, gomitted: more than
20 years, homitted: lower than university level education, iomitted: no debt (or NA)
5. Conclusions Women’s access
Our results speak to some important issues in the literature exploring female to SME finance
entrepreneurs’ access to business finance. First, the existing literature demonstrates
gender-based differences in growth aspirations and risk appetite. These empirical
observations are often deployed to suggest that gender mediates demand for finance.
Our results confirm that women are less likely than men to prioritize firm growth above
other firm goals. However, we find no evidence that this flows through to gender-based 283
differences in the demand for finance. Possibly, gendered-based differences in growth
aspirations and risk aversion have their greatest effects at firm start-up, for example,
influencing business plans and the types of firms that women start.
Second, although our dataset is structured along gender lines (size, industry, age, etc.),
we find no evidence of gender-based differences in discouragement and denial rates.
These findings are consistent with previous studies from other developed countries.
Unlike many previous studies, however, we find no gender-based differences in the
sources of business finance. Our most novel finding, however, is that there are no
gender-based differences in levels of self-reported financial constraint; that is, women are
no more likely than men to report foregoing investment opportunities due to inadequate
access to external finance.
Third, female migrant entrepreneurs in Australia do not differ from other groups in
their access to business finance. Interestingly, female migrants are significantly less
likely than other groups to regard access to external finance as important for achieving
firm goals.
Overall, these results suggest that the financial system in Australia is not
exacerbating disadvantage along gender lines within the SME sector. The main policy
implication is that Australia’s financial markets do not appear to discriminate against
established female-owned firms. This does not mean, however, that the Australian
financial system does not respond to inherited inequities. As Carter et al. (2007) and
Shaw et al. (2010) argue, the techniques used in this paper render indicators of systemic
disadvantage as exogenous risk factors. Indeed, our results demonstrate that small,
young and home-based firms face particular difficulties accessing finance, and that
these types of firms are more likely to be owned by women. Also, previous research
indicates that female entrepreneurs often start their firms with too little capital, with
negative effects for subsequent firm growth. As such, innovative policies may still
need to be considered to ensure that female-owned firms are adequately capitalized at
start-up.
Several issues raised by this paper warrant further research. First, there are
opportunities to apply some of the techniques found in the financial constraint literature
to questions about female entrepreneurs’ access to business finance. Compared to
studies of established firms, studies of start-up firms have done a much better job of
demonstrating the mediating role that gender plays in the finance-investment-growth
nexus. Second, recognizing that our proxy of demand for finance is broad, more
demand-side studies that properly control for risk, owner and firm characteristics are
required. Third, future research should test whether gender’s effects on access to
business finance differ between migrant communities and, in doing so, better reconcile
the gender, ethnicity and migrant entrepreneurship literatures in this area.
IJGE Notes
4,3 1. Irwin and Scott (2010), however, find that women starting a firm in the UK were less likely to
report financial obstacles than men.
2. Important to note, these demand-side factors are unlikely to influence denial and
discouragement rates. With regards to existing studies of relative denial and
discouragement rates, properly controlling for risk should eliminate the possibility that
284 the average female entrepreneur is a better credit risk than a male entrepreneur.
3. However, several studies show that these factors influence the types of finance used. See
Bruder et al. (2011) for in-depth review of the literature on migrants’ access to business
finance.
4. Specifically, the Chamber of Commerce and Industry Western Australia, the Victorian
Employers’ Chamber of Commerce and Industry (VECCI), the New South Wales Business
Chamber, SA Business and the Tasmanian Chamber of Commerce and Industry.
5. This figure accounts for a 21 per cent “bounce back” rate for e-mail invitations. It does not
account for e-mails that were never received because they were filtered by security software
or were never opened by invitation recipients. As such, the actual response rate may be
significantly higher than reported.
6. The UNSUCCESSFUL model is restricted to a sub-sample of respondents who report
applying for external finance (n ¼ 292). Those reporting an unsuccessful application may
eventually have secured the finance that they required.

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Corresponding author
Andrew van Hulten can be contacted at: Andrew.Van-Hulten@vu.edu.au

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