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Title: Re-interpretation of the Concept of Financial Gap
Authors: Pashang, Hossein
Johansson, Anna
Waldemar, Petra
Nolander, Marie
Department: University of Borås. School of Business and IT
Issue Date: 2010
Journal Title: European Journal of Management
ISSN: 1555-4015
Volume: 10
Issue: 2
Pages: 79-88
Publisher: International Academy of Business and Economics
Media type: text
Publication type: article, peer reviewed scientific
Keywords: financial gap
ethnomethodological perspective
language differences
Subject Category: Subject categories::Social Sciences::Economics and Business
Area of Research: Accounting
Strategic Research Area: none
Abstract: In current literature, the problem of financing small businesses is often explained in connection with the concept of Financial Gap. Generally speaking, this concept indicates that the existence of asymmetric information between the two parties that is, the owners of small businesses and financial institutions is a cause to loan denials. By applying an Ethnomethodological research perspective, this paper attempts to reinterpret the Financial Gap. By adopting this perspective, the aim is to contribute to the understanding of the Financial Gap through the analysis of the concepts used by each party in explaining the financial situations. We combined a set of data collected by in-depth interviews with the data collected by questionnaires. The idea was to capture the concepts by which the two parties interpret the Financial Gap in depth and width. The study concludes that causes to the rise of the Financial Gap have linguistic explanations. It arises from the two parties' use of different styles of language. The owners of small businesses often apply vocabularies that are compatible with the everyday activities of running the business. In contrast to this, financial institutions, like banking industries, expect that the owners of small businesses support their informational needs by rational models and formal vocabularies related to the basis of accounting that are used by big industries. The differences in styles of language become visible when the two parties, in a dissimilar way, treat ambiguities, address possibilities and constraints, present risks as well as deal with information needed for decision-making.
Appears in Collections:Artiklar och rapporter / Articles and reports (Business Administration)

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