Open AccessWe Have Got Credit!
Author(s) -
Aparna Gosavi
Publication year - 2019
Publication title -
american review of political economy
Language(s) - English
Resource type - Journals
ISSN - 1551-1383
DOI - 10.38024/arpe.222
Subject(s) - pecking order , order (exchange) , business , bank credit , credit history , finance , capital (architecture) , pecking order theory , economics , capital structure , debt , history , archaeology , evolutionary biology , biology
This paper investigates whether there is a gender bias in granting credit for businesses from Eastern Sub-Saharan Africa. It is first necessary to determine whether firms are credit-constrained. In order to identify the status of the firms with respect to credit, two recently introduced methods that can identify the credit-constrained status of firms are used. The paper uses World Bank’s Enterprise Survey Program data set from 2013 to investigate this question. The empirical results obtained, after controlling for a large number of firm-level characteristics and using country-level dummies, reveal that female-owned firms appear to have more access to credit than their male counterparts. The paper also shows that the female-owned firms in the region finance their capital according to the Pecking Order Hypothesis.