Breaking the family and friends' circle: Predictors of external financing usage among men and women entrepreneurs in a transitional economy

Abstract

This study looks at the differential effects of men and women entrepreneurs' human capital and network diversity on the likelihood of using external sources of financing (sources other than personal savings, family and friends) in the context of a transitional economy. Moderated logistical regression models using survey data from men and women new venture owners in Bulgaria (n = 555) suggest the likelihood of using external sources of financing is positively and significantly associated with the diversity of the entrepreneur's social network. Further, this effect is moderated by gender, suggesting that men make a better use of their social networks to secure sources of external financing. Implications for managerial practice and public policy are discussed.