Title: Gender differences in business success of German start-up firms

Authors: Sandra Gottschalk; Michaela Niefert

Addresses: Department of Industrial Economics and International Management, Centre for European Economic Research (ZEW), L7, 1 68161 Mannheim, Germany. ' Department of Industrial Economics and International Management, Centre for European Economic Research (ZEW), L7, 1 68161 Mannheim, Germany

Abstract: Many studies found that women-owned firms underperform. The performance gap might be attributed to gender differences in personal and firm characteristics affecting performance. This paper shall contribute to explain the female underperformance using data from the KfW/ZEW start-up panel. We track the performance of about 4,700 German start-up firms over up to four years after foundation. Sales, two measures of employment growth, and return on sales are used as performance indicators. We find that female-founded firms perform worse for the different performance indicators. At the same time, significant gender differences in many of the characteristics are observed. Compared to male entrepreneurs, female entrepreneurs have a lower level of formal education, less professional experience, are part of smaller start-up teams, are more often driven by necessity, and are overrepresented in the retail and service industries and in lower-tech industries in general. These differences can explain parts of female entrepreneurial underperformance.

Keywords: start-ups; business performance; female entrepreneurship; Germany; gender differences; business success; start-up firms; women-owned firms; female underperformance; performance gaps; ZEW; Centre for European Economic Research; KfW Bankengruppe; employment growth; return on sales; performance indicators; male entrepreneurs; female entrepreneurs; men; women; education levels; formal education; professional experience; team size; start-up teams; necessity; overrepresentation; retail industries; service industries; lower-tech industries; lower-technology; small and medium-sized enterprises; SMEs; family issues; families; gender issues.

DOI: 10.1504/IJESB.2013.050750

International Journal of Entrepreneurship and Small Business, 2013 Vol.18 No.1, pp.15 - 46

Published online: 30 Sep 2013 *

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