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Small Bus Econ (2009) 33:375395 DOI 10.1007/s11187-009-9207-5
Gender differences in business performance: evidence from the Characteristics of Business Owners survey
Robert W. Fairlie Alicia M. Robb
Accepted: 9 January 2009 / Published online: 5 May 2009 The Author(s) 2009. This article is published with open access at Springerlink.com
Abstract Using condential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses, making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and nancial capital play in contributing to why female-owned businesses have lower survival rates, prots, employment, and sales. We nd that female-owned businesses are less successful than male-owned businesses because they have less startup capital, less business human capital acquired through prior work experience in a similar business, and less prior work experience in a family business. We also nd some evidence that female business owners work fewer hours and may have different preferences for the goals of their businesses, which may have implications for business outcomes.
Keywords Business outcomes
Female entrepreneurship
JEL Classications J15 L26
1 Introduction
Although female business ownership rates have risen in recent decades, the prevalence of business ownership among women is only 5060% of that for men. The low rate of business ownership among women is a worldwide phenomenon. Aggregate data from the Organization for Economic Co-operation and Development (OECD) indicate that female self-employment rates are substantially lower than male rates in almost every reported country, with an average ratio of 0.543 (OECD 2002). In the USA, the female business ownership rate is 6.6%, which is only 60% of the male rate (Fairlie 2006).
Although data with large samples of female-owned businesses are scarce, a handful of previous studies have used business-level data to study the outcomes of female-owned rms. These studies have revealed that women-owned rms were more likely to close and had lower levels of sales, prots, and employment (Kalleberg and Leicht 1991; Rosa et al. 1996; Robb 2002; Robb and Wolken 2002). Some of the differences are dramatic: as we shall see below, estimates from the Characteristics of Business Owners (CBO) survey indicate that the sales of female-owned rms are roughly 80% lower than the average sales of male-owned...