Class
Article
College
Jon M. Huntsman School of Business
Presentation Type
Oral Presentation
Abstract
Women entrepreneurs is a growing population in the United States. Nearly half of all women entrepreneurs self-identify as a racial minority. These intersectional entrepreneurs, are entrepreneurs that identify as women-owned and minority businesses and may be at heightened risk of racism and sexism ('double jeopardy'). The intersection of race and gender is of critical importance to understand the small business loan market. Gaining access to financial capital is critical for entrepreneurs to sustain and grow their businesses. This paper examines how entrepreneurs at the intersection of race and gender are treated by financial institutions when seeking small business loans. Specifically, we compare the experiences of intersectional black women entrepreneurs to the non-intersectional white male, white female, and black male entrepreneurs. We analyze data collected using matched-pair mystery shopping field experiments. We compare the treatment testers received from banks and their employees in two major metropolitan areas of the United States. This paper explores differences in treatment among intersectional entrepreneurs in the information that is required to complete a loan application, the information provided by the bank employee on loan products, and the service quality and encouragement that is demonstrated by the bank employee. Based on these data, recommendations for public policy and business practice are proposed to help buffer and protect intersectional entrepreneurs from disparate and unfair treatment in obtaining small business financing.
Start Date
4-9-2020 2:00 PM
End Date
4-9-2020 3:00 PM
Double-Jeopardy or Not? Investigating the Experience of Black Women Entrepreneurs Seeking Small Business Financing
Women entrepreneurs is a growing population in the United States. Nearly half of all women entrepreneurs self-identify as a racial minority. These intersectional entrepreneurs, are entrepreneurs that identify as women-owned and minority businesses and may be at heightened risk of racism and sexism ('double jeopardy'). The intersection of race and gender is of critical importance to understand the small business loan market. Gaining access to financial capital is critical for entrepreneurs to sustain and grow their businesses. This paper examines how entrepreneurs at the intersection of race and gender are treated by financial institutions when seeking small business loans. Specifically, we compare the experiences of intersectional black women entrepreneurs to the non-intersectional white male, white female, and black male entrepreneurs. We analyze data collected using matched-pair mystery shopping field experiments. We compare the treatment testers received from banks and their employees in two major metropolitan areas of the United States. This paper explores differences in treatment among intersectional entrepreneurs in the information that is required to complete a loan application, the information provided by the bank employee on loan products, and the service quality and encouragement that is demonstrated by the bank employee. Based on these data, recommendations for public policy and business practice are proposed to help buffer and protect intersectional entrepreneurs from disparate and unfair treatment in obtaining small business financing.