Susan Coleman

The Role of Human and Financial Capital in the Profitability and Growth of Women‐Owned Small Firms

This paper examines the relationship between human and financial capital and firm performance for women‐ and men‐owned small firms in the service and retail sectors. Results indicate that human capital variables, including education and experience, had a positive impact on the profitability of women‐owned firms, whereas measures of financial capital had a greater impact of the profitability of men‐owned firms. The ability to secure financial capital also had a positive impact on the growth rate of men‐owned firms, but did not appear to affect the growth rate of women‐owned firms. These findings suggest that the growth aspirations for women‐owned firms may be driven by factors other than human capital or the ability to secure external capital.

Sources of Capital for Small Family-Owned Businesses Evidence from the National Survey of Small Business Finances

Securing adequate capital is an ongoing challenge for many small family-owned businesses. This article uses data from the 1993 National Survey of Small Business Finances to determine the extent to which small family-owned firms use various types of credit products. Using logistic regression, it also identifies variables that predict the likelihood of using credit. Findings reveal that size, age, and profitability of the firm were the most important predictors. Results also indicate that there were virtually no differences between family-owned and nonfamily-owned businesses in the usage of various credit products.

Financing Strategies of New Technology-Based Firms: A Comparison of Women-and Men-Owned Firms

In this article we used data from the Kauffman Firm Survey to compare the financing strategies of women-and men-owned new technology-based firms. Our findings reveal that women raised dramatically less financial capital than men in the startup year and in the subsequent four years of operation. We also found that women used a significantly higher level of external debt and a significantly lower level of external equity during the startup year. Although our findings do not allow us to definitively rule out the possibility of discrimination, particularly in the market for external equity, our results indicate that women may have different motivations and expectations for their firms. These, in turn, may determine some of their financing choices.

A RESOURCE-BASED VIEW OF NEW FIRM SURVIVAL: NEW PERSPECTIVES ON THE ROLE OF INDUSTRY AND EXIT ROUTE

This article explores factors affecting the survival and exit routes of new firms created in 2004 using data from the Kauffman Firm Survey. We draw upon the Resource-Based View to test several hypotheses regarding the impact of both tangible and intangible resources on new firm survival in both service and non-service firms. We also distinguish between two types of exit: closures (permanently stopped operations) and mergers or acquisitions. Our results reveal that, although service and non-service firms may differ in terms of industry structure, the fundamental resources that contribute to their survival are the same: education, work and life experience and adequate levels of startup financial capital. In spite of these similarities, our results did reveal industry differences in terms of exit. We found serial entrepreneurs in the service sector were more likely to exit through merger or acquisition. Conversely, intellectual property decreased the likelihood of exit through merger or acquisition for non-service firms. Thus, our findings revealed a link between human capital, industry and exit route for this sample of new firms.

IS THERE A LIQUIDITY CRISIS FOR SMALL, BLACK-OWNED FIRMS?

Loans and trade credit are major sources of short-term debt and liquidity for small firms. This article uses data from the 1998 Survey of Small Business Finances to compare the borrowing experience of small firms owned by black men to those owned by white men. Results reveal that black firm owners were more dependent on loans from non-bank sources than white owners. Black men were significantly more likely to have been turned down for their most recent loan and were more likely to be discouraged from applying for loans. Results also reveal that black men were more likely to be turned down for trade credit. Overall, these findings seem to suggest that firms owned by black men have a more difficult time securing sources of short term debt than those owned by white men.

Enhancing undergraduate AI courses through machine learning projects

It is generally recognized that an undergraduate introductory artificial intelligence course is challenging to teach. This is, in part, due to the diverse and seemingly disconnected core topics that are typically covered. The paper presents work funded by the National Science Foundation to address this problem and to enhance the student learning experience in the course. Our work involves the development of an adaptable framework for the presentation of core AI topics through a unifying theme of machine learning. A suite of hands-on semester-long projects are developed, each involving the design and implementation of a learning system that enhances a commonly-deployed application. The projects use machine learning as a unifying theme to tie together the core AI topics. In this paper, we will first provide an overview of our model and the projects being developed and will then present in some detail our experiences with one of the projects, Web User Profiling, which we have used in our AI class

‘Deconstructing’ entrepreneurial self-efficacy: a gendered perspective on the impact of ESE and community entrepreneurial culture on the financial strategies and performance of new firms

We examine the impact of entrepreneurial self-efficacy (ESE) and community entrepreneurial culture on financial strategy and firm performance, by gender. In doing so, we ‘deconstruct’ both ESE and community culture into various components and view them as multidimensional constructs. Our data sample consists of 1214 firms included in the second Panel Study of Entrepreneurial Dynamics. Our findings reveal that men raised larger amounts of financial capital than women did from both internal and external sources. Furthermore, higher levels of ESE were associated with a greater willingness to raise capital from external sources. In contrast, the entrepreneurs perceptions of community entrepreneurial culture had no impact on securing financial capital from either internal or external sources for either gender. Our results also revealed gender differences in the area of performance expectations. For both women and men, higher levels of ESE and the availability of financial capital enhanced performance expectations, whereas community entrepreneurial culture contributed to higher performance expectations for men only. This discrepancy suggests that ESE is even more important for women entrepreneurs in the sense that they need higher levels of self-confidence in order to overcome their perceptions of institutional barriers for securing financial capital and growing their firms.

Sources of Financing for New Technology Firms: Evidence from the Kauffman Firm Survey

This article uses data from the Kauffman Firm Survey to explore the financing sources and strategies of new technology-based firms. Findings reveal that technology-based firms, and particularly high tech firms, raise larger amounts of capital at startup than firms on average. These findings also suggest that, contrary to the Pecking Order and Life Cycle theories, owners of high tech firms are both willing and able to use external equity as a financing source.

CREDIT RATIONING AND BLACK-OWNED FIRMS: IS THERE EVIDENCE OF DISCRIMINATION?

This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.

The Use Of Debt By Black-Owned Firms: Recent Evidence From The 2003 Survey Of Small Business Finances

Black-owned firms are growing in terms of both number and economic importance. They play an important role in providing jobs as well as products and services, particularly in urban communities. In spite of this, prior research indicates that black-owned firms experience greater difficulty in securing sources of external capital. This study revisits this issue using newly released data from the 2003 Survey of Small Business Finances. Results reveal that black-owned firms were no less likely to have loans than white-owned firms controlling for firm and owner characteristics. Nevertheless, black-owned firms were still significantly more likely to be turned down for loans and more likely to refrain from applying because they assumed they would be turned down. Further, black firm owners who were approved for loans paid significantly higher rates of interest.