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And the children shall lead: Gender diversity and performance in venture capital

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  • Calder-Wang, Sophie
  • Gompers, Paul A.

Abstract

Given overall lack of gender diversity in the venture capital and entrepreneurship industry shown in Calder-Wang and Gompers (2017) we ask: What promotes greater gender diversity in hiring? Does diversity lead to better firm performance and higher investment returns? In this paper, using a unique dataset of the gender of venture capital partners’ children, we find strong evidence that when partners have more daughters, the propensity to hire female partners increases. Moreover, our instrumental variable results suggest that increased gender diversity improves deal and fund performance. Lastly, the effects are primarily driven by the gender of senior partners’ children.

Suggested Citation

  • Calder-Wang, Sophie & Gompers, Paul A., 2021. "And the children shall lead: Gender diversity and performance in venture capital," Journal of Financial Economics, Elsevier, vol. 142(1), pages 1-22.
    • Handle: RePEc:eee:jfinec:v:142:y:2021:i:1:p:1-22
    DOI: 10.1016/j.jfineco.2020.06.026
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    More about this item

    Keywords

    Venture capital; Gender diversity;

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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