Entrepreneurship and Economic Growth: Does Gender Matter?

Entrepreneurship literature is broad and diverse in its investigation of process and outcomes of the phenomenon (Schumpeter 1934, Leibenstein 1968, Kirzner 1997, Shane and Venkataraman 2000). Only entrepreneurial activities based on new knowledge contribute to economic growth, according to theory and empirical evidence (Schumepter 1934, Acs et al. 2003, Audretsch el al. 2008, Braunerhjelm et al. 2010). This entrepreneurship – often called Schumpeterian entrepreneurship – is linked to economic growth through the knowledge spillover theory of entrepreneurship (Braunerhjelm et al. 2010). However, while economic contribution by entrepreneurs is documented, the role of gender is unaddressed. The question of gendered contribution is necessary for two reasons. First, literature finds evidence of the underperformance of female-owned firms (Hisrich and Brush 1984, Klapper and Parker 2010, Bardasi et al. 2011). Second, the outputs from female-owned firms vary from male-owned firms by their contribution to increased female labor force participation, better health outcomes for the family, and increased child development (Welter 2004, Allen et al. 2008, Anderson and Eswaran 2009). Through this paper, the author investigates the performance of female-owned Schumpeterian entrepreneurial firms as well as the economic contributions of these firms in a cross-country analysis. In nonparametric analyses, evidence emerges of similar distributions of firm performance in current sales. When subdividing the data by human development level, and excluding combined-gender owned firms, results diverge. Female-owned entrepreneurial firms in developed countries perform similarly to male-owned firms, while in developing countries male-owned firms significantly outperform female-owned firms. From a semi-parametric quantile regression, results indicate gender does not significantly influence firm performance. This presents evidence that female underperformance may persist for entrepreneurial firms in developing countries. However, in all countries the number of female-owned entrepreneurial firms were significantly lower than male-owned firms. These findings point to consistent cultural barriers for women in innovation-related fields, such as STEM, as well as persistent gendered norms in entrepreneurship. Finally, the author finds strong evidence that the gender of the Schumpeterian entrepreneur does not matter in the contribution in economic growth. Thus, removal of cultural barriers and continued support for Schumpeterian entrepreneurship will benefit women and contribute to a country’s economic growth.