Gender gap in entrepreneurship

Abstract

Using data on the entire population of businesses registered in the states of California and Massachusetts between 1995 and 2011, we decompose the well-established gender gap in entrepreneurship. We show that female-led ventures are 63 percentage points less likely than male-led ventures to obtain external funding (i.e., venture capital). However, investors' gendered preferences can, at most, explain about 35 percent of this differential (or 22 percentage points). The most significant portion of the gap (65 percent) stems from gender differences in initial startup orientation, with women being less likely to found ventures that signal growth potential. Moreover, consistent with theories of statistical discrimination, the residual gap diminishes significantly when stronger signals of growth are available to investors for comparable female-and male-led ventures or when focal investors are more sophisticated. Finally, conditional on the reception of external funds (i.e., venture capital), women and men are equally likely to achieve exit outcomes, through IPOs or acquisitions. JEL Codes: L26 (Entrepreneurship), J16 (Economics of Gender), G24 (Venture Capital).

Women Entrepreneurship: A Systematic Review to Outline the Boundaries of Scientific Literature

“…According to a study by Guzman and Kacperczyk (2019), females are 63% less likely than males to obtain external financing in terms of risk capital, and the most significant part of the gap derives from differences in gender.…”

Exploring the Link Between Mentoring and Intangible Outcomes of Entrepreneurship: The Mediating Role of Self-Efficacy and Moderating Effects of Gender

“…Our findings further contribute to the literature on the role of gender in entrepreneurship and entrepreneurial socialization. Extant literature shows that there are gender differences in involvement and persistence in entrepreneurial activities (Scott and Shu, 2017;Smith and Tolbert, 2018;Guzman and Kacperczyk, 2019;Oppedal and Garcia, 2019). In the present study, we sought to contribute to this domain in the entrepreneurial literature by establishing whether men and women benefit equally from entrepreneurial mentoring and self-efficacy in terms of achieving intangible outcomes of entrepreneurship.…”

“…There is a big gender gap in entrepreneurship (Guzman and Kacperczyk, 2019). This is not only true regarding the number of women going into entrepreneurship but also in terms of success and persistence (Smith and Tolbert, 2018;Oppedal and Garcia, 2019) and is more pronounced in high-growth ventures (Scott and Shu, 2017).…”

Mind the gap: The role of gender in entrepreneurial career choice and social influence by founders

“…The historical lack of female entrepreneurs-and role models-is deemed a key cause for the paucity of women in entrepreneurship (Markussen & Røed, 2017). Female role models might attenuate gendered perspectives, stereotypes, and biases (e.g., in VC funding-see Guzman & Kacperczyk, 2019), and at the same time inspire other women (Thébaud, 2010;Yang & Triana, 2019). If so, female role models can have a multiplier effect by narrowing the entrepreneurship gender gap both directly and indirectly.…”

“…Second, stereotypes and social norms generating gender-specific role expectations are internalized by individuals and often discourage women from engaging in entrepreneurship by anticipation of negative stereotype threats (Kossek, Su, & Wu, 2017;Thébaud, 2010). Indeed, these threats are observed in critical stages of the entrepreneurial process such as VC funding (Guzman & Kacperczyk, 2019). Third, and as a consequence, men and women might develop distinct career preferences and opt-out of certain occupations due to perceived misfit (Kossek et al, 2017).…”