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Gender differences in business success of German start-up firms

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  • Gottschalk, Sandra
  • Niefert, Michaela

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.
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Suggested Citation

  • Gottschalk, Sandra & Niefert, Michaela, 2011. "Gender differences in business success of German start-up firms," ZEW Discussion Papers 11-019, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:11019
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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. 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.
    2. Günterberg, Brigitte & Kay, Rosemarie, 2018. "Existenzgründungen von ausländischen Staatsbürgern: Aktualisierung 2018," Daten und Fakten 20, Institut für Mittelstandsforschung (IfM) Bonn.
    3. Marilyn Young & John James Cater & Kevin James, 2019. "Examining Barriers To Success And Sources Of Assistance For U.S. Hispanic Female Entrepreneurs," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-22, June.
    4. 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.
    5. Marcus Box & Tommy Larsson Segerlind, 2018. "Entrepreneurial Teams, Gender, and New Venture Survival: Contexts and Institutions," SAGE Open, , vol. 8(2), pages 21582440187, May.
    6. Brixiova, Zuzana & Kangoye, Thierry, 2016. "Start-Up Capital and Women's Entrepreneurship: Evidence from Swaziland," IZA Discussion Papers 10279, Institute of Labor Economics (IZA).
    7. 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 of Labor Economics (IZA).
    8. 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.
    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. AMOROSO Sara & AUDRETSCH David, 2020. "The role of gender in linking external sources of knowledge and R&D intensity," JRC Working Papers on Corporate R&D and Innovation 2020-05, Joint Research Centre (Seville site).
    11. 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.
    12. Irani Arráiz, 2018. "Time to share the load: gender differences in household responsibilities and business profitability," Small Business Economics, Springer, vol. 51(1), pages 57-84, June.
    13. Nguyen, Thi Hong Hanh & Ntim, Collins G. & Malagila, John K., 2020. "Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 71(C).
    14. Kay, Rosemarie & Günterberg, Brigitte, 2015. "Existenzgründungen von ausländischen Staatsbürgern," Daten und Fakten 15, Institut für Mittelstandsforschung (IfM) Bonn.
    15. Abdul Basit & Zubair Hassan & Sharmila Sethumadhavan, 2021. "Entrepreneurial Success: Key Challenges Faced by Malaysian Women Entrepreneurs in 21st Century," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(9), pages 122-122, July.
    16. Robert Rieg, 2019. "Selbstständigkeit von Bilanzbuchhaltern und Controllern: Eine empirische Untersuchung zu Einkommen und Determinanten," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 67(1), pages 35-66.

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    More about this item

    Keywords

    start-ups; performance; gender; female entrepreneurship;
    All these keywords.

    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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