FAU Study Explores Gender Gap Among Entrepreneurs and Why Women are Less Likely than Men to Start New Ventures

MEDIA CONTACT: Jim Hellegaard
561-319-2233, jhellegaard@fau.edu

 BOCA RATON, Fla. (August 29, 2019) – Although female entrepreneurs are the fastest growing segment among start-up enterprises, women are still less likely than men to start new ventures. A new study by faculty at Florida Atlantic University and Eastern Michigan University explores the cultural factors that may explain why this gender gap exists and varies widely in countries around the world.

In the article, which was recently published in the Journal of World Business, co-authors Len Treviño, SBA Communications professor at FAU’s College of Business, Mingxiang Li, assistant professor at FAU’s College of Business, and Ratan Dheer, assistant professor at EMU’s College of Business, explain why women in some countries are more likely to initiate new ventures than in other nations.

How economically developed the countries are does not appear to explain these differences, so the researchers looked for other possible explanations, particularly socio-cultural factors that affect the way women and men think about starting business ventures. Across the 45 nations the researchers studied, women were found 30 percent less likely than men to start business ventures, which suggests that deep-seated gender beliefs may play a role in informing women and men of their perceived ability to pursue entrepreneurship.

Among their findings is that, counterintuitively, the gender gap in starting new ventures is smaller in masculine than in feminine nations, which suggests that in nations that are male dominated the social emphasis on ego goals, coupled with the organizational subjugation of women, stimulates women’s aspirations toward entrepreneurship.

“Think about a country like Sweden or Norway that’s more feminine, where both women and men can achieve top-positions in organization, the salaries are more egalitarian, so, there’s not a forced necessity for women to escape this gender egalitarian environment to start their own business ventures,” Treviño said.

This, the researchers said, illustrates that social and informational cues in masculine nations inform women that an entrepreneurial, as opposed to a salaried career, may be the means to achieve autonomy, while at the same time allowing them to acquire flexibility to attend to their family’s needs.

The research found that social norms of leniency toward non-compliance and business ethics to institutions may positively affect women’s perceived ability to start new ventures. The study’s results support recent findings that practices, such as giving gifts to public officials, evading taxes or engaging in ethical laxity, may enable female entrepreneurs to network with institutional gatekeepers and overcome stringent regulations that may be obstacles to starting new business ventures.

Dheer also emphasized the need for “greater flexibility in social and business policies when it comes to promoting the growth of female entrepreneurship.”

They also found that when women entrepreneurs face obstacles in developing a network of trust, their tendency to start new ventures slows. Their research suggests that when trust is a basis for identifying opportunities and sharing resources, it may benefit men more than women, ultimately reducing women’s perception that starting a business is feasible.

“One implication of our study is that more women leaders should be present in institutions and social and public organizations,” Dheer said. “In banks and credit unions and incubation centers, there should be more women leaders. When we have more women leaders, women will be able to trust these organizations more than they do now.”

- FAU -

About Florida Atlantic University
Florida Atlantic University, established in 1961, officially opened its doors in 1964 as the fifth public university in Florida. Today, the University, with an annual economic impact of $6.3 billion, serves more than 30,000 undergraduate and graduate students at sites throughout its six-county service region in southeast Florida. FAU’s world-class teaching and research faculty serves students through 10 colleges: the Dorothy F. Schmidt College of Arts and Letters, the College of Business, the College for Design and Social Inquiry, the College of Education, the College of Engineering and Computer Science, the Graduate College, the Harriet L. Wilkes Honors College, the Charles E. Schmidt College of Medicine, the Christine E. Lynn College of Nursing and the Charles E. Schmidt College of Science. FAU is ranked as a High Research Activity institution by the Carnegie Foundation for the Advancement of Teaching. The University is placing special focus on the rapid development of critical areas that form the basis of its strategic plan: Healthy aging, biotech, coastal and marine issues, neuroscience, regenerative medicine, informatics, lifespan and the environment. These areas provide opportunities for faculty and students to build upon FAU’s existing strengths in research and scholarship. For more information, visit www.fau.edu.