The State of Minority- and Women- Owned ... - Cleveland.com

Table 6.8. Determinants of Loan Denial Rates—USA
African American
Asian/Pacific Islander
Native American
Hispanic
Nonminority female
Judgments
Firm delinquent
Personally delinquent
Bankrupt past 7 years
$1992 profits (*10 8 )
$1992 sales (*10 8 )
$1992 assets (*10 8 )
$1992 liabilities (*10 8 )
Owner years of experience
Owner share of business
Statistical Disparities in Capital Markets
(1) (2) (3) (4) (5)
0.443 0.288 0.237 0.235 0.241
(11.21) (6.84) (5.57) (5.22) (5.13)
0.225 0.171 0.140 0.121 0.119
(4.21) (3.18) (2.56) (2.15) (2.07)
-0.016 -0.141 -0.097 -0.052 -0.083
(0.11) (1.06) (0.71) (0.35) (0.56)
0.129 0.070 0.067 0.035 0.031
(2.62) (1.42) (1.36) (0.70) (0.63)
0.088 0.048 0.047 0.036 0.033
(2.65) (1.45) (1.45) (1.06) (0.94)
0.143 0.129 0.124 0.121
(2.84) (2.56) (2.40) (2.29)
0.176 0.178 0.195 0.208
(6.50) (6.43) (6.77) (7.00)
0.161 0.128 0.124 0.119
(4.45) (3.56) (3.38) (3.17)
0.208 0.179 0.162 0.167
(3.11) (2.68) (2.37) (2.33)
-0.000 -0.000 -0.000 -0.000
(0.89) (1.64) (1.78) (1.83)
-0.000 -0.000 -0.000 -0.000
(3.08) (3.38) (3.28) (3.38)
0.000 0.000 0.000 0.000
(0.51) (0.60) (0.40) (0.37)
0.000 0.000 0.000 0.000
(0.61) (1.11) (1.04) (1.17)
-0.003 -0.001 -0.002 -0.002
(2.59) (1.30) (1.55) (1.72)
0.001 0.000 0.000 0.000
(1.91) (0.71) (0.26) (0.30)
Owner Education (5 indicator variables) No Yes Yes Yes Yes
Other Firm Characteristics (17 variables) No No Yes Yes Yes
Characteristics of the Loan (13 variables) No No Yes Yes Yes
Geographic Division (8 indicator variables) No No No Yes Yes
Industry (60 indicator variables) No No No Yes Yes
Month/Year of Application (51 indicator variables) No No No No Yes
Type of Financial Institution (16 indicator vars.) No No No No Yes
N 2,007 2,007 2,006 1,985 1,973
Pseudo R 2 .0608 .1412 .2276 .2539 .2725
Chi 2 143.6 333.4 537.3 595.4 635.8
Log likelihood -1108.8 -1013.8 -911.6 -874.8 -848.7
Source: See Table 6.1.
Notes: (1) Reported estimates are derivatives from Probit models, t-statistics are in parentheses. (2) “Other firm characteristics”
include variables indicating whether the firm had a line of credit, 1990 employment, firm age, metropolitan area, a new firm since
1990, legal form of organization (sole proprietorship, partnership, S-corporation, or C-corporation), 1990-1992 employment
change, existing long run relation with lender, geographic scope of market (local, regional, national or international), the value of
the firm’s inventory, the level of wages and salaries paid to workers, the firm’s cash holdings, and the value of land held by the
firm. (3) “Characteristics of the loan” include the size of the loan applied for, a variable indicating whether the loan was backed
by real estate, and twelve variables indicating the intended use of the loan.
NERA Economic Consulting 199