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The Rise of Female Entrepreneurs: New Evidence on Gender Differences in Liquidity Constraints

Author

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  • Sauer, Robert M.

    (Royal Holloway, University of London)

  • Wilson, Tanya

    (University of Glasgow)

Abstract

Small business activity and female entrepreneurship have become increasingly important features of the UK economy since the start of the Great Recession. In this paper, we re-examine the impact of liquidity constraints on new business formation in an instrumental variables framework, using a previously unexplored data set from the UK. The new results indicate that it is primarily single women that drive the well-established empirical relationship between personal wealth and business start-ups. Therefore, public policies specifically targeted at relieving the liquidity constraints of women could help further accelerate the rise of female entrepreneurship.

Suggested Citation

  • Sauer, Robert M. & Wilson, Tanya, 2015. "The Rise of Female Entrepreneurs: New Evidence on Gender Differences in Liquidity Constraints," IZA Discussion Papers 8981, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8981
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    References listed on IDEAS

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    6. Holtz-Eakin Douglas & Rosen Harvey S, 2005. "Cash Constraints and Business Start-Ups: Deutschmarks Versus Dollars," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-26, February.
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    8. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
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    10. Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-1526, November.
    11. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    12. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    13. Mark P. Taylor, 2001. "Self–Employment and Windfall Gains in Britain: Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 68(272), pages 539-565, November.
    14. Jenny Nykvist, 2008. "Entrepreneurship and Liquidity Constraints: Evidence from Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 23-43, March.
    15. Blanchflower, David G & Meyer, Bruce D, 1994. "A Longitudinal Analysis of the Young Self-Employed in Australia and the United States," Small Business Economics, Springer, vol. 6(1), pages 1-19, February.
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    Cited by:

    1. Vladasel, Theodor & Lindquist, Matthew J. & Sol, Joeri & van Praag, Mirjam, 2021. "On the origins of entrepreneurship: Evidence from sibling correlations," Journal of Business Venturing, Elsevier, vol. 36(5).
    2. Sara Amoroso & Albert N. Link, 2018. "Under the AEGIS of knowledge-intensive entrepreneurship: employment growth and gender of founders among European firms," Small Business Economics, Springer, vol. 50(4), pages 899-915, April.
    3. Ajzenman, Nicolás & Aksoy, Cevat Giray & Guriev, Sergei, 2022. "Exposure to transit migration: Public attitudes and entrepreneurship," Journal of Development Economics, Elsevier, vol. 158(C).
    4. Hsuan-Hua Huang & Hsing-Wen Han & Kuang-Ta Lo & Tzu-Ting Yang, 2023. "Liquidity Constraints, Cash Windfalls, and Entrepreneurship: Evidence from Administrative Data on Lottery Winners," Papers 2303.17029, arXiv.org.
    5. Sara, Amoroso & Albert, Link, 2017. "Under the AEGIS∗ of knowledge intensive entrepreneurship: Employment growth and gender of founders among European Firms," UNCG Economics Working Papers 17-9, University of North Carolina at Greensboro, Department of Economics.
    6. Zhang, Jiaping & Zhang, Huirong & Gong, Xiaomei, 2022. "Mobile payment and rural household consumption: Evidence from China," Telecommunications Policy, Elsevier, vol. 46(3).
    7. Nicolás Ajzenman & Cevat Giray Aksoy & Sergei Guriev, 2020. "Exposure to Transit Migration, Public Attitudes and Entrepreneurship," Department of Economics Working Papers wp_gob_2020_02, Universidad Torcuato Di Tella.

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    More about this item

    Keywords

    liquidity constraints; entrepreneurship;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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