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Male vs. female business owners: Are there differences in investment behavior?

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  • Pelger, Ines

Abstract

This paper analyzes gender differences in the investment activity of German small and medium sized enterprises (SMEs). The empirical analysis is carried out on a sample of firms drawn from the KfW Mittelstandspanel, a representative survey of German SMEs for the period from 2003 to 2009. We find evidence that female-owned firms are less likely to invest and if they invest, then their average investment rate is lower. These differences cannot entirely be explained by firm or owner characteristics. Furthermore, women s investment is less sensitive to cash flow, which indicates that it is unlikely that their lower investment is driven by difficulties in acquiring external finance. An analysis of stated investment goals reveals that women have different preferences and attitudes towards investment. They indicate to a lesser extent aspiring and growth-orientated investment goals like sales increase, innovation/R&D or implementation of new products.

Suggested Citation

  • Pelger, Ines, 2012. "Male vs. female business owners: Are there differences in investment behavior?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62016, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc12:62016
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    References listed on IDEAS

    as
    1. Rebel A. Cole & Hamid Mehran, 2009. "Gender and the availability of credit to privately held firms: evidence from the surveys of small business finances," Staff Reports 383, Federal Reserve Bank of New York.
    2. Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2010. "Does gender matter in bank-firm relationships? Evidence from small business lending," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2968-2984, December.
    3. Muravyev, Alexander & Talavera, Oleksandr & Schäfer, Dorothea, 2009. "Entrepreneurs' gender and financial constraints: Evidence from international data," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 270-286, June.
    4. Verheul, Ingrid & Thurik, Roy, 2001. "Start-Up Capital: "Does Gender Matter?"," Small Business Economics, Springer, vol. 16(4), pages 329-345, June.
    5. Vania Sena & Jonathan Scott & Stephen Roper, 2012. "Gender, borrowing patterns and self-employment: some evidence for England," Small Business Economics, Springer, vol. 38(4), pages 467-480, May.
    6. Stewart C. Myers, 2001. "Capital Structure," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 81-102, Spring.
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    9. Stephen, Roper & Jonathan M., Scott, 2009. "Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data," MPRA Paper 23342, University Library of Munich, Germany.
    10. Myers, Stewart C, 1984. " The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
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    13. Shyam-Sunder, Lakshmi & C. Myers, Stewart, 1999. "Testing static tradeoff against pecking order models of capital structure," Journal of Financial Economics, Elsevier, vol. 51(2), pages 219-244, February.
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    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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