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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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    References listed on IDEAS

    as
    1. Du Rietz, Anita & Henrekson, Magnus, 2000. "Testing the Female Underperformance Hypothesis," Small Business Economics, Springer, vol. 14(1), pages 1-10, February.
    2. Müller, Kathrin, 2010. "Academic spin-off's transfer speed--Analyzing the time from leaving university to venture," Research Policy, Elsevier, vol. 39(2), pages 189-199, March.
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    Keywords

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    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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