Gender differences and new venture performance

Abstract

PurposeThis study compares the performance of female majority-owned new ventures (FNV) vs. male majority-owned new ventures (MNV). It analyzes the differences in levels of variables such as education, the same industry work experience of owners, and other venture level attributes between FNVs and MNVs. More importantly, this study employs decomposition techniques to determine the individual contribution from the intergender difference of each attribute on the performance of the new venture. For example, the study finds that, on average, the owners of an MNV possessed 3.4 years more of the same industry work experience than their FNV counterparts. This difference in work experience accounted for 47% of the “explained” gap [1] in Net Profits between the FNVs and MNVs.Design/methodology/approachThis paper utilizes the Kauffman Firm Survey, a longitudinal dataset of 4,928 new ventures started in the USA in 2004. It employs Blinder-Oaxaca and Fairlie decomposition techniques in conjunction with OLS and Logit regressions. Both methods provide point estimates of contributions to the performance gap due to the heterogeneity in each attribute across the groups (FNV and MNV). This approach has a significant advantage over OLS or mediation analysis, which can only provide a directional analysis of the contributions of differences in attributes to performance.FindingsThe paper finds no performance gap between MNVs and FNVs. It further investigates whether the heterogeneous characteristics of MNVs vs FNVs are related to different effects on survival and performance. It finds that characteristics such as owners’ work experience in the same industry, average hours worked by owners in the new venture, the technology level of the venture, and its incorporation status are related with a differential impact on new venture survival and performance.Research limitations/implicationsAll firms in the dataset belonged to a single cohort (2004) of new ventures started in the US. Future studies are encouraged to develop a dataset from multiple geographies and founding over several years so that the results may be more generalizable.Practical implicationsThe paper provides crucial practical guidance to policymakers, investors, and entrepreneurs. In general, policies that enhance the work experience of women entrepreneurs and provide access to infrastructure such as daycares, which may allow them to work more hours, would probably improve the performance of FNVs.Originality/valueThe paper furthers the literature on women entrepreneurship by analyzing point estimates of differential contribution of disparate variables to performance. From a methodological perspective, the study reconciles the results between regression and decomposition analyses.

Twenty-five years of New England Journal of Entrepreneurship: a bibliometric review

“…Women entrepreneurs may encounter both “positive spillover” and “work-family conflict” resulting from “self-employment” as opposed to employment such as “accountants” (Jaim, 2022; Prottas, 2012). The research in this cluster also explores “owner characteristics”, “women business-owners”, “political unrest” and “new venture performance” using a “gender” lens (Jaiswal, 2020).…”

The entrepreneurial cognitive adjustment mechanism: transitional entrepreneurship as a solution to mitigate illegal migration

“…smuggling costs, which represent years of foregone income) for larger benefits in the future (Clemens and Ogden, 2014). However, if we integrate findings from the immigrant entrepreneur's literature, we can argue that Central Americans at risk of illegal migration may have a better shot at economic well-being through entrepreneurship in their home country – irrespective of gender differences (Jaiswal, 2020) – as opposed to waged employment or entrepreneurship abroad. Central Americans at risk of illegal migration can leverage their existing resources and networks to successfully launch new businesses at home and increase their well-being, rather than as undocumented immigrants in the USA because they may not effectively transfer educational degrees to the US job market or may experience discrimination as employees if they are able to get a job (Cueto and Álvarez, 2015).…”

Effect of institutional support and entrepreneurial knowledge on women’s entrepreneurial self-efficacy and venture performance in a developing country

“…Soomro et al ’s (2021) findings underline the significant effect that perceived self-efficacy and entrepreneurial networking activities have on entrepreneurial success among Pakistani entrepreneurs. Jaiswal (2020) claims that owners’ work experiences and the level of technology have a robust effect on a new venture’s survival and performance. According to Puni et al (2018), the dimensions of entrepreneurship education, including opportunity recognition and entrepreneurship knowledge, have a positive and significant impact on self-efficacy and EI .…”