A Global Research Perspective
Edited by Candida G. Brush, Nancy M. Carter, Elizabeth J. Gatewood, Patricia G. Greene and Myra M. Hart
Chapter 9: Comparing the Growth and External Funding of Male- and Female-controlled SMEs in Australia
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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