Women Receiving Less Capital Than Men

There has been some recent concern over the reasons why women entrepreneurs typically do not receive as much capital funding as their male counterparts. Kate Eddleston, Ph.D. and Assistant Professor of Entrepreneurship and Innovation at Northeastern University’s College of Business Administration presents what she believes are some of the reasons.

"Women have a higher probability of borrowing from family and friends; however, they have made strides in gaining similar access to line-of-credit loans from commercial banks as men (see JSBM study by Haynes & Haynes for details). Research by Coleman (JSBM) also showed that women are less likely to use external financing as a source of capital. However, women have also been found to pay higher interest rates and to be more likely to put up collateral than men for capital," Dr. Eddleston points out.

"Women are more likely to establish maximum business size thresholds beyond which they would not like to expand (and the thresholds are smaller than those of male entrepreneurs). Thus, women appear less interested in growth (and thus, have less of a need for external funding). (see JBV study by Cliff 1998 for details)," Prof. Eddleston adds. "Growth for women has also been found to be a very deliberate choice - they tend to understand the costs and benefits of growth.

"Women are underrepresented in their proportion of high-growth firms. They tend to be in service businesses (which are not capital intensive), and also, many start home-based businesses (which again, do not require much financing), " Dr. Eddleston concludes. "Also, women are often seeking very different things from entrepreneurship than their male colleagues. Many women start businesses to better balance work and family, or they manage their businesses so as to maximize socioemotional characteristics (as opposed to seeking status, growth and wealth like many men) (see my recent JBV).
But at the same time, one has to wonder if the higher price women pay for capital (which suggests some form of discrimination) limits the growth of women's businesses."

Below is Professor Eddleston’s bio:
Professor Eddleston received her PhD in Management from the University of Connecticut and her graduate degree from Cornell University and Groupe Essec (IMHI). Her research has appeared in journals such as the Academy of Management Journal, Academy of Management Executive, Academy of Management Perspectives, Human Resource Management Review, Journal of Occupational and Organizational Psychology, Entrepreneurship Theory and Practice, Journal of Business Venturing, and Journal of Applied Psychology. Professor Eddleston has recently been selected as a Family Owned Business Institute Research Scholar by the Family Owned Business Institute of the Seidman College of Business at Grand Valley State University.

China will fail to have 50 Fortune 500 companies by 2010

The Chinese government has set a goal to create 50 Fortune 500 companies by 2010. Lenovo is one such firm, in the PC business. Others include Huawei in telecom equipment, Haier in white goods, TCL in electronics, Shanghai Automotive Industries Corporation in cars, and so on. CEOs of large Chinese companies, most with close ties to the government, have been given marching orders to make this happen. “But don’t bet on it,” says Ravi Ramamurti, professor and faculty coordinator of international business at the College of Business Administration at Northeastern University.

“The problem is that these companies have too easy access to capital and are therefore prone to squander it. They cannot usually move fast enough because they must get the nod from the Chinese government on key decisions,” Prof. Ramamurti states. “They lack the management depth to operating globally. Even when the companies are listed on the stock exchange, they respond to government signals more than capital-market signals. Finally, their ties to the Communist government raise red flags every time they try to acquire Western companies.”

“The real hope for building world-class Chinese companies may lie in the new crop of private Chinese firms that have been popping up everywhere. These firms are nimbler, have lower costs than the giant state-dependent companies, and are much more frugal in using capital,” Prof. Ramamurti also points out. “Examples include companies like Cherry and Geely in the automotive business, which have grown growing faster both at home and abroad than their giant state-owned counterparts. I would put my money any day on these firms over the state-controlled behemoths.”

Below is a short bio for Prof. Ramamurti. Please let me know if you’d like to speak to him about this topic.

Ravi Ramamurti, Professor, International Business; Faculty Coordinator, Executive MBA program. Professor Ramamurti does research and consulting on corporate strategy and business-government relations in emerging economies. He holds a BSc degree in physics from the University of Delhi, an MBA from the Indian Institute of Management, and a DBA from Harvard University. From 1998 to 2000 he was Visiting Professor at MIT's Sloan School of Management in the Strategy and International Management group, and from 1986 to 1988, he was a visiting professor at Harvard Business School in the Business, Government, and Competition Area. He also lectures regularly at the International Institute for Management Development (IMD) in Lausanne, Switzerland. Prior to joining the College of Business Administration in 1981, he served as a consultant to the Planning Commission of the government of India, and as executive assistant to the CEO of a large engineering company. Professor Ramamurti's most recent book, Privatizing Monopolies, was published by Johns Hopkins University Press. His earlier volume, Privatization and Control of State-Owned Enterprises, co-edited with Raymond Vernon of Harvard University, was published by the World Bank. His articles have been published in a number of journals, including Academy of Management Review, California Management Review, Harvard Business History Review, International Executive, International Trade Journal, Journal of General Management, Journal of Interamerican Studies, Journal of International Business Studies, Journal of World Business, Long Range Planning, Management Science, and World Development . Professor Ramamurti has served as a consultant to several public and private firms and to the governments of Argentina, Bangladesh, Bolivia, Ecuador, Egypt, India, Indonesia, Malaysia, Mexico, Nicaragua, Saudi Arabia, and South Korea. He has also advised international agencies, among them the World Bank, United Nations, US Information Agency, and US Agency for International Development.

Based off of a WebCollage press release, the reporter from webpronews.com discusses some research habits of online consumers from a survey that WebCollage conducted.

To read the full story, go here:
http://www.paradigmshiftpr.com/onlineproduct.htm

Summer Video Games

In a May 26th story in Associated Press, the reporter discusses some of the popular video games that will be coming out this summer. Ted Pollack, an analyst with Jon Peddie Research states that traditionally, video game sales slow down during the summer because it is an indoor activity.

To read the story, go here:
http://www.paradigmshiftpr.com/summerof.htm

New Trends in Video Games

In a May 11th story in Christian Science Monitor entitled, “Note to video gamers: get moving,” by Gloria Goodale, the reporter explores some new trends in video games. After years of popularity, first person shooting games are losing steam and making way for the increasing popular e-rated games such as virtual bowling and virtual tennis in part due to Nintendo's Wii. Kids want a bigger experience with the games instead of just sitting on the couch. Marketing professor at Northeastern University's College of Business Administration, Gloria Barczak believes that this “YouTube” generation wants to be more involved with their games. "If you look at these people who are making their own videos, these are folks who want to be involved in creating an experience for themselves," says Professor Barczak. "They are not passive consumers anymore."

To read the full story, go here:
http://www.paradigmshiftpr.com/noteto.htm