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

Statistical Disparities in Capital Markets
cards for business expenses. On the other hand, there is evidence in the ENC and in the nation as
a whole that Asian-/Pacific Islander-owned firms are less likely to access business credit cards.
Credit card use for financing business expenses may be an area where further research is
warranted. Unfortunately, available data on this subject is quite limited.
Table 6.11. Models of Credit Card Use–USA
Specification
1) Business Credit
Card
2) Personal Credit
Card
Source: See Table 6.1.
African
American
0.035
(1.35)
0.019
(0.74)
Asian/
Pacific
Islander
-0.096
(3.23)
-0.019
(0.63)
Native
American
0.085
(1.00)
0.019
(0.23)
Hispanic
0.024
(0.79)
-0.042
(1.40)
Nonminority
Female
0.018
(0.83)
0.028
(1.28)
Sample
Size
Notes: (1) Reported estimates are derivatives from Probit models, t-statistics are in parentheses. (2) Each line of this
table represents a separate regression with the same control variables as Column 3 of Table 6.8 but excluding the
loan characteristics. (3) The dependent variable indicates whether the firm used business or personal credit cards to
finance business expenses. (4) In all specifications, the sample size is all firms. (5) Other races are excluded due to
sample size limitations.
Table 6.12. Models of Credit Card Use–ENC
Specification
1) Business Credit
Card
2) Personal Credit
Card
Source: See Table 6.1.
African
American
0.042
(1.49)
0.024
(0.84)
Asian/
Pacific
Islander
-0.102
(3.31)
-0.023
(0.74)
Notes: See Table 6.11. Control for ENC included.
Native
American
0.096
(1.08)
0.036
(0.41)
Hispanic
0.018
(0.58)
-0.058
(1.87)
Nonminority
Female
0.026
(1.09)
0.019
(0.78)
F. Differences in Interest Rates Charged on Approved Loans
NERA Economic Consulting 206
4,633
4,633
Sample
Size
Although most of our analysis has addressed whether minority- and nonminority-owned firms
are treated equally in terms of their probability of loan denial, another way that differential
treatment may emerge is through the interest rate charged for approved loans. Discrimination
may be apparent if banks approve loans to equally creditworthy minority- and nonminorityowned
firms, but charge the minority-owned firms a higher interest rate. Therefore, we estimated
model specifications analogous to those reported previously for loan denials, but now the
dependent variable represents the interest rate charged for firms whose loans were approved and
the set of explanatory variables includes characteristics of the loan. More formally, the model we
estimated takes the form:
4,633
4,633