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

Table 6.19. Determinants of Loan Denial Rates—ENC
African American
Asian/Pacific Islander
Hispanic
Nonminority Female
African American*ENC
Asian/Pacific Islander*ENC
Hispanic*ENC
Nonminority female*ENC
ENC division
Statistical Disparities in Capital Markets
(1) (2) (3) (4) (5)
0.406 0.243 0.205 0.189 0.214
(7.35) (4.98) (4.67) (4.26) (4.48)
0.155 0.124 0.045 0.025 0.031
(2.57) (2.40) (1.17) (0.70) (0.82)
0.344 0.257 0.206 0.193 0.181
(6.20) (5.09) (4.51) (4.27) (4.07)
0.079 0.042 0.018 0.016 0.010
(1.97) (1.30) (0.70) (0.63) (0.39)
0.082 0.000 0.017 0.016 0.029
(0.53) (0) (0.17) (0.17) (0.27)
0.000 0.000 0.000 0.000 0.000
(0.00)
0.000
(0.00)
0.017
(0.11)
-0.057
(1.25)
(0.00)
(0.00)
(0.00)
(0.00)
NERA Economic Consulting 218
0.000
(0.00)
0.000
(0)
-0.053
(1.50)
0.000
(0.00)
0.023
(0.19)
-0.039
(1.41)
0.000
(0.00)
0.020
(0.17)
-0.047
(1.27)
Creditworthiness Controls (8 variables) No Yes Yes Yes Yes
Owner’s 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 (7 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
0.000
(0.00)
0.030
(0.23)
-0.046
(1.24)
N 919 919 919 919 900
Pseudo R 2 0.1099 0.2892 0.3757 0.3912 0.4021
Chi 2 93.04 244.81 318.10 331.23 337.46
Log likelihood -376.8 -300.9 -264.3 -257.7 -250.9
Source: See Table 6.17.
Notes: (1) t-statistics in parentheses. (2) Other creditworthiness controls are the four other variables included in
Column 2 of Table 6.18.
Table 6.19 focusing on the ENC division yields similar results—showing significantly larger
denial probabilities for African American- and Hispanic-owned firms (21.4 percent and 18.1
percentage points, respectively) than for nonminority male-owned firms. The ENC indicator was
not significant in Table 6.19. None of the interaction terms between ENC and race, ethnicity or
gender were significant either, indicating that the loan denial results for the ENC are not
significantly different than for the nation as a whole.
Although tempered by the smaller sample size available, the quality of the experiment is
somewhat better using the 1998 data than it was using the 1993 data due to the availability of an