Gender productivity gap: does gender-equal ownership compensate for female entrepreneurs' lack of prior industry experience?

Plain English Summary This study shows that female entrepreneurs operate less productive new ventures as majority owners than their male counterparts. But the gender productivity gap substantially reduces when they operate new ventures with men as equal owners. Since female entrepreneurs are often less experienced than male entrepreneurs, gender-equal ownership can yield productivity gains by facilitating the flow of essential industry knowledge from experienced male co-owners to inexperienced female co-owners. We show that the gender productivity gap reduces from 16.5 to 5.9% if female entrepreneurs choose to co-own equally-owned ventures, rather than women-owned ventures. We also confirm that experienced female owners improve the productivity of women-owned ventures relative to men-owned ventures. Meanwhile, we show that equally-owned ventures yield productivity gains only when experienced male co-owners are matched with inexperienced female co-owners. Thus, less experienced female entrepreneurs should especially consider gender-equal ownership as an attractive ownership option, knowing that it can facilitate knowledge transfer and improve business performance. Female entrepreneurs often have less prior industry knowledge or experience than male entrepreneurs. To ameliorate the adverse consequences for business performance, they could equally co-own ventures with their experienced male peers. Using a representative sample of 183,358 new ventures in Canada, we explore this under-investigated issue by analyzing the labour productivity of women-owned and equally-owned ventures, relative to men-owned ventures, from 2006 to 2017. We also quantify the influence of the principal owners' prior industry experience on the relative labour productivity of women-owned and equally-owned ventures. Our regression analyses show that women-owned and equally-owned ventures are 16.5% and 5.9% less productive than men-owned ventures, respectively. We also confirm that women-owned ventures realize productivity gains from having experienced female owners. Meanwhile, we find that equally-owned ventures yield productivity gains only when they comprise experienced male co-owners and inexperienced female co-owners. More generally, we contribute new evidence-based insights on the gender productivity gap and why gender-equal ownership can help.

Automated summary

This study reveals that female entrepreneurs operate less productive new ventures as majority owners than their male counterparts, but the gender productivity gap significantly reduces when they operate new ventures with men as equal owners. Gender-equal ownership can facilitate the flow of essential industry knowledge from experienced male co-owners to inexperienced female co-owners, leading to productivity gains. The study emphasizes that female entrepreneurs, especially those with less experience, should consider gender-equal ownership as an attractive option to improve business performance.