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- Title
CREDIT RATIONING AND BLACK-OWNED FIRMS:: IS THERE EVIDENCE OF DISCRIMINATION?
- Authors
YONGJIN PARK; COLEMAN, SUSAN
- Abstract
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.
- Subjects
UNITED States; AFRICAN American business enterprises; CREDIT; RACE discrimination; SMALL business; INDUSTRIAL surveys
- Publication
Journal of Developmental Entrepreneurship, 2009, Vol 14, Issue 3, p255
- ISSN
1084-9467
- Publication type
Article
- DOI
10.1142/S1084946709001302