Characteristics of New Firms: A Comparison by Gender

Based on data from the Kauffman Firm Survey, compares characteristics of the owner, type of business, industry, financing, size, and performance of new firms owned by women and by men. Considers the factors behind women-owned firms' underperformance

Sources of Economic Hope: Women's Entrepreneurship

This report suggests that accelerating female entrepreneurship could have the same positive effect on the U.S. economy that the large-scale entry of women into the labor force had during the 20th century. While women represent more than half of the educated U.S. population, they have far lower levels of participation in growth-oriented entrepreneurship than men do. Women-owned businesses account for only about 16 percent of the nation's employer firms and, among high-growth firms, they typically account for fewer than 10 percent of founders

Computer Use in Small U.S. Firms: Is There a Digital Divide?

This article uses data from the 1998 Survey of Small Business Finances to explore the use of computers and the Internet by small firms. Results reveal that firms owned by black men and firms owned by Asian men were significantly less likely to use computers for business purposes than firms owned by white men. There were no significant differences between firms owned by white men and those owned by white women or by Hispanic men. Other significant predictors of computer use included measures affirm size, firm age, organizational status, owner age, and the educational level of the owner

Small Firm Use of Debt: An Examination of the Smallest Small Firms

Access to capital is an on-going challenge for small firms. Capital is required to address a broad range of needs: to cover start-up costs, to provide working capital, to secure facilities or equipment, and to hire employees. Most small firms are at a relative disadvantage, because they are too small to access the public debt and equity markets. Similarly, they are typically too small to show up on the radar screens of venture capitalists on patrol for the next potential hot IPO. Alternatively, very small firms are heavily reliant on bank loans, trade credit, and informal sources of capital including loans from family and friends. Entrepreneurial finance literature typically segments small firms into two types. Entrepreneurial firms are those that start out small but have the objectives of growth, profitability, and eventually, perhaps, an IPO. Lifestyle firms , on the other hand, are firms that are small and intend to remain small. The point of this distinction is that firms of different size might be expected to have different types of objectives. Correspondingly, one might expect different attitudes toward and use of various sources of capital. This paper will use data from the 1993 National Survey of Small Business Finances (NSSBF) to examine the financing strategies of very small firms, a largely understudied segment of the small business market. Specifically, it will examine the types of debt capital used by the smallest small firms and compare their usage to that of somewhat larger small firms. Further this article will attempt to determine the variables that predict the use of debt capital and externally acquired debt capital by small firms and larger firms. Finally, it will explore the extent to which smaller and larger firms apply for external debt capital and the extent to which they are approved for loans

Capital Structure in Small Manufacturing Firms: Evidence from the Data

This article examines theories of capital structure pertaining to small firms and looks at the capital structure of small to mid-sized manufacturing firms within the context of those theories. Results provide support for Leland and Pyle\u27s (1977) Signaling Theory, Myer\u27s (1984) Pecking Order Theory, Berger and Udell\u27s (1998) Life Cycle Theory. Contrary to the findings of prior research, these results revealed that industry sector was not a significant determinant of capital structure. Rather, these findings show that capital structure in small to mid-sized firms is determined by measures of firm size, firm age, organizational status, profitability, and asset structure

The Liability of Newness and Small Firm Access to Debt Capital: Is There a Link?

Literature pertaining to the “liability of newness†contends that newer firms face particular difficulties and a greater risk of failure. This article seeks to determine if “newness†is also a disadvantage in the acquisition of debt capital. Results indicate that newer firms were significantly less likely to have lines of credit and were also significantly more likely to have been turned down for their most recent loan. Even when we control for length of relationship with the primary financial services provider, personal guarantees, and collateral, younger firms were still more likely to be turned down for loans. Small firms are an essential part of the United States economy. According to the U.S. Small Business Administration (SBA), there were 22.9 million small firms, defined as firms having 500 or fewer employees, in the United States in 2002 (Small Business by the Numbers, 2002). In fact, small firms represent 99 percent of all firms in this country. They provide approximately half of Gross Domestic Product as well as the majority of new jobs. Small firms are also an important source of innovation in the development of new products, services, and technologies. Given the role played by small firms, it is in our interest to identify factors that contribute to their likely success. In keeping with that, studies of small firm survival and failure have repeatedly identified difficulties with financial management and an inability to secure adequate sources of capital as major contributors to dissolution (Gaskill et al., 1993), Lussier, 1996; Watson et al., 1998). Many small firms are launched with inadequate financial resources. To compound this problem, small firms, unlike larger, publicly-held firms, are unable to raise capital in the public debt and equity markets (Ang, 1991). Alternatively, they are restricted to sources of capital that include the owner’s savings, loans from family and friends, trade credit, and loans from banks and other financial service providers (Berger & Udell, 1998; Bitler et al., 2001). Even in the case of bank loans, however, small firms are more likely to be denied than larger, more established firms. As noted above, the inability to secure external sources of capital raises the risk of firm failure. On a slightly less dire note, inadequate capital may also restrict the firm’s ability to grow, to hire employees, or to introduce new products and services thus impairing profitability and growth in the long term

The Impact of Human Capital Measures on Firm Performance: A Comparison by Gender, Race and Ethnicity

Prior research suggests that firms owned by women and minorities are smaller, less profitable, and less growth-oriented than those owned by white men. Prior research also suggests that firm performance is influenced by the firm owner\u27s level of human capital in the form of education, employment experience, and life experiences that might help him to prepare for the challenges of small business ownership. This artical compares the performance of firms owned by white men to those owned by white women and by minority small business owners to determine if higher levels of human capital eliminate performance gaps between them. Results reveal that firms owned by white and black women and firms owned by black men were still significantly smaller, even controlling for industry sector and various measures of human capital. Contrary to prior research, however, firms owned by women and minorities were no less profitable nor less likely to grow. The sole exception to this finding was that firms owned by Asian men were significantly less likely to exhibit sales growth than firms owned by white men

Borrowing Patterns for Small Firms: A Comparison by Race and Ethnicity

This article explores the use of debt capital by small firms using data from the 1998 Survey of Small Business Finances. An examination of the data reveals differences in the characteristics and borrowing experience of small firms by race and ethnicity. Results indicate that although minority firm owners were just as likely to apply for loans, they were significantly less likely to be approved for them. Further, black small business owners were less likely to even bother applying for a loan, because they assumed they would be denied. These findings have implications for the ability of minority small business owners to grow their firms and contribute to the economic well-being of their communities

Free and Costly Trade Credit: A Comparison of Small Firms

Trade credit is a major source of financing for small firms. This article examines the extent to which small firms use trade credit as well as the extent to which they use free versus costly trade credit. Those firms that use free trade credit make payment within the discount period. Alternatively, firms that use costly trade credit forego available discounts and may also make payment after the due date thereby incurring substantial additional costs. Results reveal that larger firms were more likely to use trade credit. Younger firms were more likely to be denied trade credit and were also more likely to pay late as were firms with a history of credit difficulties and those with high levels of debt. Firms owned by white women and Hispanic men were significantly less likely to have trade credit than firms owned by white men. Further, firms owned by black men were significantly more likely to be denied trade credit

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