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Gender differences in business success of German start-up firms

Author

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  • Sandra Gottschalk
  • Michaela Niefert

Abstract

Many studies found that women-owned firms underperform. The performance gap might be attributed to gender differences in personal and firm characteristics affecting performance. This paper shall contribute to explain the female underperformance using data from the KfW/ZEW start-up panel. We track the performance of about 4,700 German start-up firms over up to four years after foundation. Sales, two measures of employment growth, and return on sales are used as performance indicators. We find that female-founded firms perform worse for the different performance indicators. At the same time, significant gender differences in many of the characteristics are observed. Compared to male entrepreneurs, female entrepreneurs have a lower level of formal education, less professional experience, are part of smaller start-up teams, are more often driven by necessity, and are overrepresented in the retail and service industries and in lower-tech industries in general. These differences can explain parts of female entrepreneurial underperformance.

Suggested Citation

  • Sandra Gottschalk & Michaela Niefert, 2013. "Gender differences in business success of German start-up firms," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 18(1), pages 15-46.
  • Handle: RePEc:ids:ijesbu:v:18:y:2013:i:1:p:15-46
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    References listed on IDEAS

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    1. Du Rietz, Anita & Henrekson, Magnus, 2000. "Testing the Female Underperformance Hypothesis," Small Business Economics, Springer, vol. 14(1), pages 1-10, February.
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    Cited by:

    1. Andreas Koch & Jochen Späth & Harald Strotmann, 2013. "The role of employees for post-entry firm growth," Small Business Economics, Springer, vol. 41(3), pages 733-755, October.
    2. Brixiova, Zuzana & Kangoye, Thierry, 2016. "Start-Up Capital and Women's Entrepreneurship: Evidence from Swaziland," IZA Discussion Papers 10279, Institute for the Study of Labor (IZA).
    3. Lechmann, Daniel S. J. & Schnabel, Claus, 2012. "What Explains the Gender Earnings Gap in Self-Employment? A Decomposition Analysis with German Data," IZA Discussion Papers 6435, Institute for the Study of Labor (IZA).
    4. Michaela Niefert & Sandra Gottschalk, 2014. "Gründerinnen auf dem Vormarsch? – Die Entwicklung der Beteiligung von Frauen am Gründungsgeschehen," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 8(3), pages 115-145, September.
    5. Günterberg, Brigitte & Kay, Rosemarie, 2018. "Existenzgründungen von ausländischen Staatsbürgern: Aktualisierung 2018," Daten und Fakten 20, Institut für Mittelstandsforschung (IfM) Bonn.
    6. Kuncová, M. & Hedija, V. & Fiala, R., 2016. "Firm Size as a Determinant of Firm Performance: The Case of Swine Raising," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(3), pages 1-13, September.
    7. Kay, Rosemarie & Günterberg, Brigitte, 2015. "Existenzgründungen von ausländischen Staatsbürgern," Daten und Fakten 15, Institut für Mittelstandsforschung (IfM) Bonn.
    8. Domenico Depalo & Francesca Lotti, 2013. "Firms and gender: performance differentials between male and female firms," Questioni di Economia e Finanza (Occasional Papers) 184, Bank of Italy, Economic Research and International Relations Area.
    9. Daniel Lechmann & Claus Schnabel, 2012. "Why is there a gender earnings gap in self-employment? A decomposition analysis with German data," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-25, December.
    10. repec:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9925-z is not listed on IDEAS

    More about this item

    Keywords

    start-ups; business performance; female entrepreneurship; Germany; gender differences; business success; start-up firms; women-owned firms; female underperformance; performance gaps; ZEW; Centre for European Economic Research; KfW Bankengruppe; employment growth; return on sales; performance indicators; male entrepreneurs; female entrepreneurs; men; women; education levels; formal education; professional experience; team size; start-up teams; necessity; overrepresentation; retail industries; service industries; lower-tech industries; lower-technology; small and medium-sized enterprises; SMEs; family issues; families; gender issues.;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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