Small matching grants for women entrepreneurs: lessons from the past recession
Small Business Economics
; 59(1):117-142, 2022.
Article
in English
| ProQuest Central | ID: covidwho-1877921
ABSTRACT
During the economic slowdown caused by the financial crisis in 2008, grants for entrepreneurs were made available to support economic development. Whether such a policy instrument is effective for business development is a highly relevant question in the aftermath of the COVID-19. We evaluate the causal effects of small business development matching grants using a quasi-experimental approach. The grants were exclusively targeted to women entrepreneurs and provided during the recession after the financial crisis. Our findings demonstrate an increase in bank loans and a positive impact on turnover, value-added, capital, employment, and overall factor productivity for more experienced women entrepreneurs. As the grants are too small to have direct economic effects or indirect effects via the certification effect, they alleviate time and information constraints of women entrepreneurs. The cost-benefit analysis shows an increase in value-added that outweighs the scheme-related costs.Plain English SummaryThis study evaluates the effect of small public grants for women entrepreneurs. Grants were used for childcare and business consultancy costs to alleviate time and information constraints of women entrepreneurs. Benefiting from these grants resulted in higher bank loans. The women entrepreneurs on average invested more money in capital and had better performance measures like turnover and value-added. The effect was particularly evident among more experienced women entrepreneurs. The cost-benefit analysis shows grant-induced increase in value-added outweighs the scheme-related costs. The study implies small public grants for women entrepreneurs increase small firms’ growth, and these grants are in addition a cost-effective policy tool.
Business And Economics--Small Business; Women entrepreneurship; Gender financing gap; Policy evaluation; Business development grant; Recession; Economic crisis; Consultants; Benefit cost analysis; Bank loans; Economic conditions; Women; Entrepreneurs; Child care; Value; Grants; Productivity; Alleviation; Cost analysis; Recessions; Certification; Plain language; COVID-19; Indirect effects; Small business; Economic development; Capital; Employment; Money
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Language:
English
Journal:
Small Business Economics
Year:
2022
Document Type:
Article
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