Female Entrepreneurship
In the Exit Motivations office we’re participating in coming days in a few events across Cambridge and Cranfield Universities, both at the forefront of driving female entrepreneurship. Today’s blog, following on from one last year looking at the challenge of trying to tease more females into Entrepreneurship, looks at research numbers, revisits gendered life course dynamics in entrepreneurship and also celebrates some of the progressive things that continue to happen.
Let’s start with some stats. Ongoing doctorate research into the gender piece in exiting entrepreneurs gives a good indication of the split of male/female entrepreneur. Of 34 recent reviewed journals just one was female focused, and that was a bit negatively positioned, Failure or Voluntary Exit, Justo et al 2015. This focused on the exit behaviour of 219 Spanish female entrepreneurs and found that, contrary to previous research, voluntary exit rather than failure, was the main cause of female exit (more on this below). The gender split across the journals gives a broad indication of the split across different countries: 64/36% male (Chinese), 54.7/45.3% male (UK), 83.7/16.3% (Italian), 79/21% (US) and 62/38% (German).
Two journals that give us a bit of an insight are Justo et al (above) and also that of Jayawarna et al, A Gendered Life Course Explanation. Jayawarna finds that ‘women caring for young children are more likely to exit given limited returns related to incompatible demands…’. As we have discussed in wider groups, since this was published in 2020, everchanging household dynamics may influence the outcome of this research if it were to be replicated, potentially influenced by Covid,. Certainly the dynamic shift in working patterns give a newfound freedom to flexibility and a move away from traditional family behavioural constructs.
Justo et al (2015) discuss, ‘Are female entrepreneurs more likely to fail than male entrepreneurs?’ With a few exceptions, existing literature finds that female-owned ventures perform worse and are more likely to fail than male-owned, reinforcing the female underperformance hypothesis (Du Rietz and Henrekson, 2000; Rosa et al., 1996). However, most studies come to this conclusion based upon higher exit rates for female-owned ventures; thereby neglecting recent theoretical development and empirical testing which demonstrate entrepreneurs exiting ventures for a myriad of reasons—both voluntary (e.g. new professional opportunity) and involuntary (e.g. bankruptcy)—many having little to do with firm performance. The bulk of this recent research argues that exit and failure are different constructs (Ucbasaran et al., 2013).
Whilst giving some relatively modest science on entrepreneurial exit, it starts to unlock some constructs around female exit. The more we understand about this will help early challenges, entrepreneurial entry and education become more relevant and equip entrepreneurs with the tools to overcome potential challenges.