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Bridging the Gender Gap in Entrepreneurship: Evidence from Europe

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  • Elvin Afandi

    ()

  • Majid Kermani

Abstract

There is no gender difference between success in establishing a business once both males and females have the same preference to self-employment and attempts towards establishing a new business. However, the gender gap tends to be huge when it comes to individual preferences and attempts to start up an entrepreneurial activity. In this study, we empirically estimate the role of inequality in individual and country attributes between man and woman in the bridging this gender entrepreneurship gap. Using Oaxaca-type decomposition and its extensions on choice of weighting matrix for non-linear probability models, we found that differences in both individual as well as country characteristics largely favor males, while the former play greater role in explaining the gender gap. About a one third of the gender gap in both latent as well as nascent entrepreneurship can be traced back to females owning smaller endowments than males. Empirical results also show differences in return to measured characteristics favor males. Nevertheless, a portion of gender gap that is unexplained by the differences in these characteristics and their coefficients (or return) could still indicate gender discrimination.

Suggested Citation

  • Elvin Afandi & Majid Kermani, 2014. "Bridging the Gender Gap in Entrepreneurship: Evidence from Europe," William Davidson Institute Working Papers Series wp1074, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2014-1074
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/132973/1/wp1074.pdf
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    References listed on IDEAS

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    1. Jacques Silber & Michal Weber, 1999. "Labour market discrimination: are there significant differences between the various decomposition procedures?," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 359-365.
    2. Saul Estrin & Tomasz Mickiewicz, 2011. "Institutions and female entrepreneurship," Small Business Economics, Springer, vol. 37(4), pages 397-415, November.
    3. repec:nbr:nberch:3044 is not listed on IDEAS
    4. Elena Bardasi & Shwetlena Sabarwal & Katherine Terrell, 2011. "How do female entrepreneurs perform? Evidence from three developing regions," Small Business Economics, Springer, vol. 37(4), pages 417-441, November.
    5. Estrin, Saul & Mickiewicz, Tomasz, 2009. "Do Institutions Have a Greater Effect on Female Entrepreneurs?," IZA Discussion Papers 4577, Institute for the Study of Labor (IZA).
    6. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
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    8. Werner Bönte & Monika Piegeler, 2013. "Gender gap in latent and nascent entrepreneurship: driven by competitiveness," Small Business Economics, Springer, vol. 41(4), pages 961-987, December.
    9. Mathia Sinning & Markus Hahn & Thomas K. Bauer, 2008. "The Blinder–Oaxaca decomposition for nonlinear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 480-492, December.
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    Cited by:

    1. Moder, Isabella & Bonifai, Niccolò, 2017. "Access to finance in the Western Balkans," Occasional Paper Series 197, European Central Bank.
    2. repec:kap:sbusec:v:48:y:2017:i:3:d:10.1007_s11187-016-9789-7 is not listed on IDEAS

    More about this item

    Keywords

    latent entrepreneurship; nascent entrepreneurship; gender gap;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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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