Table of Contents

Growth-oriented Women Entrepreneurs and their Businesses

Growth-oriented Women Entrepreneurs and their Businesses

A Global Research Perspective

New Horizons in Entrepreneurship series

Edited by Candida G. Brush, Nancy M. Carter, Elizabeth J. Gatewood, Patricia G. Greene and Myra M. Hart

Enterprising new firms drive economic growth, and women around the world are important contributors to that growth. As entrepreneurs, they seize opportunities, develop and deliver new goods and services and, in the process, create wealth for themselves, their families, communities, and countries. This volume explores the role women entrepreneurs play in this economic progress, highlighting the challenges they encounter in launching and growing their businesses, and providing detailed studies of how their experiences vary from country to country.

Chapter 9: Comparing the Growth and External Funding of Male- and Female-controlled SMEs in Australia

John Watson, Rick Newby and Ann Mahuka

Subjects: business and management, diversity and management, entrepreneurship, gender and management

Extract

John Watson, Rick Newby and Ann Mahuka INTRODUCTION ‘Understanding how firms grow …, especially small firms, is an important issue’ (Carpenter and Petersen, 2002, p. 298) because small and medium enterprises (SMEs) provide the ‘engine of economic growth’ for many countries (Berger and Udell, 1998, p. 613). However, ‘despite a recent revival in research, comparatively little is known about firm growth or its determinants’ (Carpenter and Petersen, 2002, p. 298). Winborg and Landstrom (2001) argued that financial problems (lack of funds) constrained the development and growth of SMEs because many SMEs are unable to access the same kinds of growth funding (particularly equity raisings) often available to large businesses. This view has been supported by a number of researchers, for example: Berger and Udell (1998); Becchetti and Trovato (2002) and Carter et al. (2003). Further, it has been suggested that the lack of funding options is even more acute for female-owned SMEs (Riding and Swift, 1990; Breen et al., 1995; Brush et al., 2001). However, in a national survey of US small businesses, Levenson and Willard (2000) found that only about 2 percent of firms did not obtain the funding for which they had applied. As this figure included both creditworthy and non-creditworthy firms, Levenson and Willard concluded that the number of credit-constrained firms in the US was quite small. Levenson and Willard also reported that approximately 4 percent of firms are discouraged from applying for funding because they expected a financial institution would turn down their request. It would appear,...

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