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

Table 6.18. Determinants of Loan Denial Rates—USA
African American
Asian/Pacific Islander
Hispanic
Nonminority female
Judgments
Firm delinquent
Personally delinquent
Bankrupt past 7 years
$1998 sales (*10 8 )
$1998 firm equity (*10 8 )
Owner home equity (*10 8 )
Owner net worth (*10 8 )
Owner years of experience
Owner share of business
Statistical Disparities in Capital Markets
(1) (2) (3) (4) (5)
0.422 0.254 0.217 0.192 0.218
(7.94) (5.36) (5.05) (4.52) (4.74)
0.148 0.129 0.049 0.023 0.028
(2.54) (2.52) (1.25) (0.65) (0.77)
0.353 0.269 0.211 0.183 0.171
(6.44) (5.37) (4.69) (4.21) (4.00)
0.087 0.049 0.024 0.016 0.011
(2.22) (1.55) (0.96) (0.66) (0.44)
0.272 0.249 0.272 0.262
(4.28) (4.32) (4.47) (4.20)
0.081 0.115 0.103 0.111
(2.88) (4.20) (3.88) (4.01)
0.092 0.039 0.042 0.045
(2.85) (1.59) (1.69) (1.76)
0.504 0.406 0.392 0.395
(4.48) (3.83) (3.67) (3.64)
-0.000 -0.000 0.000 0.000
(2.47) (0.26) (0.02) (0.03)
0.000 0.000 0.000 0.000
(1.40) (0.46) (0.20) (0.06)
0.000 0.000 0.000 0.000
(0.52) (1.47) (0.96) (0.90)
-0.000 -0.000 -0.000 -0.000
(1.25) (1.28) (1.19) (1.24)
-0.002 -0.001 -0.000 -0.000
(1.42) (0.49) (0.34) (0.21)
0.000 -0.000 0.000 -0.000
(0.75) (0.12) (0.03) (0.33)
Dun & Bradstreet credit ratings (4 variables) No Yes Yes Yes Yes
Owner Education (6 indicator variables) No Yes Yes Yes Yes
Other Firm Characteristics (17 variables) No No Yes Yes Yes
Characteristics of the Loan (1 variable) No No Yes Yes Yes
Geographic Division (8 indicator variables) No No No Yes Yes
Industry (8 indicator variables) No No No Yes Yes
Year of Application (5 indicator variables) No No No No Yes
Type of Financial Institution (11 indicator vars.) No No No No Yes
N 924 924 924 924 905
Pseudo R 2 .1061 .2842 .3714 .3910 .4015
Chi 2 90.0 241.1 315.1 331.8 337.8
Log likelihood -379.3 -303.7 -266.7 -258.3 -251.7
Source: See Table 6.17.
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, 1998 full time equivalent
employment, firm age, metropolitan area, legal form of organization (sole proprietorship, partnership, LLP,
S-corporation, C-corporation, or LLC), existing long run relation with lender, geographic scope of market (regional,
national, foreign or international), the value of the firm’s inventory, the firm’s cash holdings, and the value of land
held by the firm. (3) “Characteristics of the loan” includes the size of the loan applied for.
NERA Economic Consulting 217