Migrant Entrepreneurs' Access to Business Finance in Australia
Vol. Volume 18 Number 1 March/2013
Andrew Van Hulten and Abdullahi Ahmed
Migration status has been neglected both theoretically and empirically in much of the existing literature that explores whether particular social groups face undue difficulties accessing business finance. This paper tests whether Australia’s migrant entrepreneurs have greater difficulty accessing external business finance than their Australia-born counterparts. In doing so it tests the theoretical proposition that the passage of time (or time spent in Australia) mediates a relationship between migration status and access business finance by determining borrow-lender information asymmetries. Drawing on data from a comprehensive survey of small- and medium-sized businesses in five Australian states, the study compares the rates of denial, discouragement and financial constraint and the sources of finance of migrant and non-migrant entrepreneurs in Australia. We find that long-term migrant entrepreneurs are more likely than Australia-born entrepreneurs i). to report access to finance as an obstacle, ii).to pass up investment opportunities due to inadequate access to finance, and iii). to have obtained funding from family and friends. However, no significant differences are found between migrants (long-term and recent) and Australia-born entrepreneurs in terms of denial and discouragement rates, or in the propensity to use bank finance.
Financial discrimination, Discouraged borrowers, Migrant entrepreneurship, SME finance