JOURNAL OF BUSINESS DIVERSITY

Cultural Consensus in Lending to Knowledge-Based Businesses

Author(s): Gary Gorman, Peter J. Rosa, Alex Faseruk

Citation: Gary Gorman, Peter J. Rosa, Alex Faseruk, (2012) "Cultural Consensus in Lending to Knowledge-Based Businesses," Journal of Business Diversity, Vol.12, Iss. 3, pp. 26 - 42

Article Type: Research paper

Publisher: North American Business Press

Abstract:

Previous research reveals a consistent culture of lending by financial institutions when conventional business proposals are evaluated. Consistency may not be displayed for proposals based on knowledgebased business (KBB) with weak collateral and track record. In addressing this gap it is difficult to conceptualize and measure culture across diverse financial lending institutions. Consensus analysis was employed to research the nature of consensus across institutions in Eastern Canada. Respondents were asked to review two-stage conventional and KBB proposals. A high level of consensus was observed for all account managers from diverse institutions when considering a traditional proposal, but divergent trends emerged when considering the KBB proposal. KBB specialists exhibit high consensus with each other but differ sharply from the culture of other account managers. Results should interest entrepreneurs, finance researchers and policymakers.