The Entrepreneurship Gender Gap

Although the number of women-owned enterprises has been growing relatively quickly, only about 40% of new entrepreneurs in the United States are women, notes Irina Stoyneva, PhD, assistant professor of management. She studies strategic management and decision making, with an emphasis on how entrepreneurs deal with ambiguity, uncertainty and risk. Recently, she has been considering the factors affecting women’s decisions about becoming entrepreneurs.

“Increasing rates of female entrepreneurship could have significant economic benefit,” Dr. Stoyneva observes. “To that end, I am studying existing data and applying theories from sociology, feminism and economics to explore what drives the choice of an entrepreneurial career for women.” The answers, she is finding, are not straightforward.

In a recent study, she explored this provocative question: “Might reducing the gender gap in career opportunities, economic resources and political engagement serve as a disincentive for women to start businesses?”. The research—which drew on country-level data from 89 nations—suggests that while women’s equality of economic participation narrows the entrepreneurship gender gap, greater equality within the political and policy spheres widens the gap.

Dr. Stoyneva also found that a country's business regulation efficiency negatively moderates both effects: the positive effect of more women participating in the workforce is weakened and even becomes negative when the efficiency of business regulations is accounted for; but the negative effect of the political participation of women on the proportion of women entrepreneurs is stronger and further reinforced.

“On one hand,” Dr. Stoyneva says, “increased gender equality has reduced the resource constraints women often face in launching a business. It also normalizes the societal view of women as ‘breadwinners’ and perpetuates women’s interest in entrepreneurship. On the other hand, family-friendly policies, paid maternity leave and public child care—which all gender-equalize the division of work—negate the need women may feel to start their own business.”

These findings suggest just how complex an issue this is—and how rich are the opportunities for studying the most effective ways to address the entrepreneurship gender gap.