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Breaking barriers or maintaining status quo? Female representation in decision-making group of venture capital firms and the funding of woman-led businesses

Author

Listed:
  • Xu, Lei
  • Ou, Amy Y.
  • Park, Haemin Dennis
  • Jiang, Han

Abstract

We examine whether and when female representation in decision-making groups of venture capital firms affects the firms' decision to fund woman-led businesses. By developing an intra- and inter-group categorization framework for group decision-making, we argue that, in the male-dominated venture capital industry, decision-making groups with higher female representation are less likely to fund woman-led businesses. However, this negative effect is mitigated when the decision-making group has more politically neutral members or when members have more shared prior employment affiliations. Using a longitudinal panel dataset of funding decisions by 151 U.S.-based venture capital firms, the empirical analyses support our theoretical predictions. We also enriched and complemented our empirical findings with qualitative evidence.

Suggested Citation

  • Xu, Lei & Ou, Amy Y. & Park, Haemin Dennis & Jiang, Han, 2024. "Breaking barriers or maintaining status quo? Female representation in decision-making group of venture capital firms and the funding of woman-led businesses," Journal of Business Venturing, Elsevier, vol. 39(1).
    • Handle: RePEc:eee:jbvent:v:39:y:2024:i:1:s0883902623000824
    DOI: 10.1016/j.jbusvent.2023.106368
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