IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/z5he2.html
   My bibliography  Save this paper

Gender Gap in Entrepreneurship

Author

Listed:
  • Guzman, Jorge
  • Kacperczyk, Aleksandra

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). 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 to external investors. However, the residual gap is as much as 35 percent and much of this disparity likely reflects investors’ gendered preferences. 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 appear to be 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.

Suggested Citation

  • Guzman, Jorge & Kacperczyk, Aleksandra, 2018. "Gender Gap in Entrepreneurship," SocArXiv z5he2, Center for Open Science.
    • Handle: RePEc:osf:socarx:z5he2
    DOI: 10.31219/osf.io/z5he2
    as

    Download full text from publisher

    File URL: https://osf.io/download/5be82ae5d354e900187b7a0c/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/z5he2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Carter, Nancy M. & Gartner, William B. & Shaver, Kelly G. & Gatewood, Elizabeth J., 2003. "The career reasons of nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(1), pages 13-39, January.
    2. Sara Carter & Eleanor Shaw & Wing Lam & Fiona Wilson, 2007. "Gender, Entrepreneurship, and Bank Lending: The Criteria and Processes Used by Bank Loan Officers in Assessing Applications," Entrepreneurship Theory and Practice, , vol. 31(3), pages 427-444, May.
    3. Barbara J. Orser & Allan L. Riding & Kathryn Manley, 2006. "Women Entrepreneurs and Financial Capital," Entrepreneurship Theory and Practice, , vol. 30(5), pages 643-665, September.
    4. Samuel Kortum & Josh Lerner, 2000. "Assessing the Contribution of Venture Capital to Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 674-692, Winter.
    5. Ramana Nanda & Matthew Rhodes-Kropf, 2013. "Innovation and the Financial Guillotine," NBER Working Papers 19379, National Bureau of Economic Research, Inc.
    6. Seth Carnahan & Rajshree Agarwal & Benjamin A. Campbell, 2012. "Heterogeneity in turnover: the effect of relative compensation dispersion of firms on the mobility and entrepreneurship of extreme performers," Strategic Management Journal, Wiley Blackwell, vol. 33(12), pages 1411-1430, December.
    7. Phillip Kim & Howard Aldrich & Lisa Keister, 2006. "Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States," Small Business Economics, Springer, vol. 27(1), pages 5-22, August.
    8. Antoinette Schoar, 2010. "The Divide between Subsistence and Transformational Entrepreneurship," NBER Chapters, in: Innovation Policy and the Economy, Volume 10, pages 57-81, National Bureau of Economic Research, Inc.
    9. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003. "Discrimination in the Small-Business Credit Market," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 930-943, November.
    10. Ken S. Cavalluzzo, 2002. "Competition, Small Business Financing, and Discrimination: Evidence from a New Survey," The Journal of Business, University of Chicago Press, vol. 75(4), pages 641-680, October.
    11. Susan Coleman & Alicia Robb, 2009. "A comparison of new firm financing by gender: evidence from the Kauffman Firm Survey data," Small Business Economics, Springer, vol. 33(4), pages 397-411, December.
    12. Jorge Guzman & Scott Stern, 2016. "The State of American Entrepreneurship: New Estimates of the Quality and Quantity of Entrepreneurship for 32 US States, 1988-2014," NBER Working Papers 22095, National Bureau of Economic Research, Inc.
    13. Steven A. Lippman & Richard P. Rumelt, 2003. "A bargaining perspective on resource advantage," Strategic Management Journal, Wiley Blackwell, vol. 24(11), pages 1069-1086, November.
    14. Nancy M. Carter & Kathleen R. Allen, 1997. "Size determinants of women-owned businesses: choice or barriers to resources?," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 9(3), pages 211-220, January.
    15. Sharon Belenzon & Aaron K. Chatterji & Brendan Daley, 2017. "Eponymous Entrepreneurs," American Economic Review, American Economic Association, vol. 107(6), pages 1638-1655, June.
    16. Jorge Guzman & Scott Stern, 2016. "Nowcasting and Placecasting Entrepreneurial Quality and Performance," NBER Chapters, in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 63-109, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guzman, Jorge & Kacperczyk, Aleksandra (Olenka), 2019. "Gender gap in entrepreneurship," Research Policy, Elsevier, vol. 48(7), pages 1666-1680.
    2. Emma Galli & Danilo V. Mascia & Stefania P. S. Rossi, 2020. "Bank credit constraints for women‐led SMEs: Self‐restraint or lender bias?," European Financial Management, European Financial Management Association, vol. 26(4), pages 1147-1188, September.
    3. Kimberly A. Eddleston & Jamie J. Ladge & Cheryl Mitteness & Lakshmi Balachandra, 2016. "Do you See what I See? Signaling Effects of Gender and Firm Characteristics on Financing Entrepreneurial Ventures," Entrepreneurship Theory and Practice, , vol. 40(3), pages 489-514, May.
    4. YVES ROBICHAUD & JEAN-CHARLES CACHON & EGBERT McGRAW, 2019. "Gender Differences In Venture Financing: A Study Among Canadian And Us Entrepreneurs," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-21, September.
    5. Isabel Martínez-Rodríguez & Consolación Quintana-Rojo & Pedro Gento & Fernando-Evaristo Callejas-Albiñana, 2022. "Public policy recommendations for promoting female entrepreneurship in Europe," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1235-1262, September.
    6. Francesco Campanella & Luana Serino, 2019. "Firms Use of Financial Leverage: Evidence from Italy," Review of Economics & Finance, Better Advances Press, Canada, vol. 17, pages 65-78, August.
    7. Mascia, Danilo V. & Rossi, Stefania P.S., 2017. "Is there a gender effect on the cost of bank financing?," Journal of Financial Stability, Elsevier, vol. 31(C), pages 136-153.
    8. Fiona Wilson, 2016. "Making Loan Decisions in Banks: Straight from the Gut?," Journal of Business Ethics, Springer, vol. 137(1), pages 53-63, August.
    9. Saibal Ghosh, 2023. "Gender and discouraged borrowers: Evidence from India," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1731-1752, October.
    10. Jeroen Mahieu & Francesca Melillo & Peter Thompson, 2022. "The long‐term consequences of entrepreneurship: Earnings trajectories of former entrepreneurs," Strategic Management Journal, Wiley Blackwell, vol. 43(2), pages 213-236, February.
    11. Giorgio Calcagnini & Germana Giombini & Elisa Lenti, 2012. "Gender differences in bank loan access," Working Papers 1212, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2012.
    12. Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2010. "Does gender matter in bank-firm relationships? Evidence from small business lending," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2968-2984, December.
    13. José Luis Crespo-Espert & Antonio García-Tabuenca & Federico Pablo-Martí, 2012. "Women, entrepreneurial activity and territory: differences or myths?," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Entrepreneurship, Social Capital and Governance, chapter 6, pages 115-159, Edward Elgar Publishing.
    14. Anastasia Cozarenco & Ariane Szafarz, 2013. "Female Access to Credit in France: How Microfinance Institutions Import Disparate Treatment from Banks," AMSE Working Papers 1350, Aix-Marseille School of Economics, France, revised Dec 2013.
    15. Bradley, Samantha R. & Gicheva, Dora & Hassell, Lydia & Link, Albert N., 2013. "Gender Differences in Access to Private Investment Funding to Support the Development of New Technologies," UNCG Economics Working Papers 13-9, University of North Carolina at Greensboro, Department of Economics.
    16. Pietro Santoleri, 2020. "Innovation and job creation in (high-growth) new firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(3), pages 731-756.
    17. Wellalage, Nirosha & Locke, Stuart, 2017. "Access to credit by SMEs in South Asia: do women entrepreneurs face discrimination," Research in International Business and Finance, Elsevier, vol. 41(C), pages 336-346.
    18. Anastasia Cozarenco & Ariane Szafarz, 2018. "Gender Biases in Bank Lending: Lessons from Microcredit in France," Journal of Business Ethics, Springer, vol. 147(3), pages 631-650, February.
    19. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, April.
    20. Geiger, Mark, 2020. "A meta-analysis of the gender gap(s) in venture funding: Funder- and entrepreneur-driven perspectives," Journal of Business Venturing Insights, Elsevier, vol. 13(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:z5he2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.