Exploring the financing gap between native born women‐ and immigrant women‐owned firms at the start‐up stage

Abstract

PurposeThe main purpose of this study is to provide empirical evidence which identifies the impact of ethnicity and other relevant variables on external capital acquisition among Swedish women‐owned businesses at start‐up.Design/methodology/approachSeveral methods have been employed to analyze the sample including a binary logistic regression model. The sample consists of 836 women‐owned businesses in southeast Sweden; 97 immigrant‐owned, 739 native born‐owned.FindingsThe results indicate that there are partly significant differences between native women‐owned firms and immigrant woman‐owned businesses at start‐up. Unlike the native‐owned firms, the immigrant woman‐owned businesses rely more on loans from family members and less on bank loans.Practical implicationsThe results reveal that age has a positive impact on loans from family members, while the additional job outside one's own business, the amount of the owner's personal start‐up capital and firm size positively influenced access to capital from banks. The owners' level of education, previous business experience, the legal form taken by the firm and the industry affiliation conversely played no significant role in explaining the women owners' attitudes toward loans from either friends or the bank.Originality/valueTo the authors' knowledge, this study is the first empirical investigation addressing this issue in the Swedish context.